It's when sasuke is taken away with orochimaros 5 goons; at the border of the leaf and sound villige
It's episode 107 through 134, though I cannot remember which he exactly scratches it, I believe it's the last one.
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naruto does not scratch itachi's headband because it was scratched when he first came into the show because itachi scratches it himself before we see him on the episode
They have a really big and epic fight in episodes 129- 134 in the original naruto series.
This fight between Danzo and Sasuke happens in Naruto Shippuden Episode 209: Danzo's Right Arm. More information about Itachi comes out in this episode as well.
To simply answer the question... NO, Sasuke does not die. Where the heck did that come from?
127-134.
naruto manga 480 thru 490
Watch Episode no 133, 134 of Naruto 1st season during the fight of Naruto and Sasuke this scene comes in...