Sink down to the bottom and go into the passage to the right of the passage leading to the room where you met Ruto.  Float up the other side.  Use your hookshot to get over the spikes and go through the locked door.

In this room kill as many of those spider things as you can first then use your Iron Boots to wade through the middle of the water, avoiding the whirlpools and the boulder.  Float up and out on the other side and go through the door.  Drop to the nearest ledge on your right and blow open the crack in the wall.  Don't go through it yet.  Instead, swim across to the left platform and blow open the discolored bricks.  Go through this one and push that block that's in there all the way forward.  Now loop back around to the first hole and go in there and pull the block as far as you can.  Loop back around once again and push it the rest of the way onto the underwater switch.  This will raise the water level.  Float up with it and go through the door (not the one you came through, the other one.  It's got steps in front of it).  Now in this room step on the floor switch and quickly cross the gap by hopping on the water geysers then go through the door.  You don't have to jump on the third geyser, you can make the jump from the second to the door to save time.

In here avoid the boulder and head right (upstream) then use your boots to sink into the deep water.  Walk along the passage, float up the other side and go through the locked door.  Get the Boss key from the treasure chest.  Now go back outside, go down stream and you're back in that room with all the spider things and the vortex's.  Go back through the door you first came in and make your way back to the main room again.  Once there float up and go through the door with the red block floating in front of it and raise the water to the highest level. Now look for one of those dragon head statues with a hookshot target on it.  Use the hookshot to get over there and go through the door behind it.  Go up the ramp while trying to avoid those moving spike things (this is a lot harder than it sounds.  Try going up the right side when the first spike thing is moving to the left and about halfway over and keep running straight up) and go through the boss door.  Jump onto one of the platforms and you'll get a warning about the water.  Now you'll meet the level boss…

Water Temple Boss:  Morhpa

This boss is fairly tough but not overly so.  When it start to morph into a tentacle just get far away from it.  You can use your hookshot on the targets on the walls to get away faster.  I stayed on the outside edge all the time so as to avoid falling in the water.  Now once you're far enough away Z target that little red thing and when it stops spinning around so much, use your hookshot to pull it out of the tentacle and bring it toward you.  Then hit it with your sword.  Another method is using your Din's Fire spell.  Stay fairly close to the tentacle that has the little red thing in it.  When it's about to grab you use Din's Fire and the tentacle will dissolve.  Then quickly do a Jump attack (push A) on the red thing to get in a nice solid hit.  Another idea is to try to corner the red thing and just wail on it not letting it get back into the water.  After a bit it will start using two tentacles which is more difficult.  If one of the tentacles gets you you're in for some serious damage.  Just keep doing either or both of these methods and that little red thing will finally die.  The water will drain so go nab your heart container and step in the blue light and you're finally past this hellish level.