I am not going to lie to you - the Water Temple is by far the biggest pain in the ass to complete. You have to constantly switch your boots from the Kokiri Boots to the Iron Boots. In addition, you have to change the water level many times as well. Explore the place for a bit. If you come to the surface and it appears that there is no way for you to grab one of the edges to pull yourself up, you can always try sinking to the floor (from now on, whenever I say "sink" I mean for you to put on the Iron Boots; in addition - whenever I say "surface" that means take off the Iron Boots and put on the Kokiri Boots) again and possibly using your hookshot (if there are holds for it on the ceiling) to pull yourself up. Also, in the very large room at the beginning, there is one place that you cannot reach, for your hookshot will not stretch long enough to pull yourself across the large gap. The special item in this temple is the Longshot. This is the same hookshot but with an extended chain that can reach much longer than the regular hookshot.
When you have collected all of the keys that you can, sink to the very bottom level and enter the hallway that has a torch on each side of it (the torches should not be lit because you are underwater). You should soon meet Princess Ruto. She will tell you to follow her and she will begin to surface. Do the same, and you will rise for a while (you may notice a large crack in the wall on one of the middle floors - bomb that crack when the water level is lower). Keep rising until you hit the surface. I believe in that room there will be a Triforce Crest on the wall. Walk up to the crest and play Zelda's Lullaby on your Ocarina. This will lower the water level as low as it can go. Use these crests in this fashion to change the water level - I believe there are three such crests throughout the stage. Next, enter the door in this room (if it is locked and there are unlit torches, use Din's Fire to light them). In the next room collect the treasure.
Now - with the water level much lower, explore many of the passages again. There may be some places that you can now bomb (there is one spot where there is a crack in the floor, and there is another where there is a crack in the wall). These passages will lead to other places and possibly more keys and items. You mainly want to find more keys. There is one place where there is a pipe in the water that resembles a dragon or a giant snake. In the open mouth of one of these there may be a switch. Hit the switch with your hookshot to throw it. This may open a gate. Also, there are some switches that send up geysers from the ground. You will have to utilize these geysers to cross the large gaps. The crest that raises the water level to the middle level is inside of the large building in the center of the temple. Use your hookshot to pull yourself up to the ledges and play Zelda's Lullaby by the crest to raise the level. When you do this, you will notice that a block floated up. If you put on your Iron Boots and sink down to where the block used to be, I believe that it may uncover a passage.
The third water-level-controlling crest is somewhere a little above the top floor. It is technically in the large room in the temple (the one with the building that houses the second crest) but you can only reach it via other passages. This crest raises the water level up to the level it was at the beginning. You may have to raise and lower the water more if you do not do everything that you could have done when the water level was at the right level. There is another area in the temple that is rather problematic. You will enter a very large, seemingly completely open room and there will be a tree in the center of it. When you approach the tree, a Dark Link will appear. This is like a silhouette of your character. It attacks in the same fashion that you do and is extremely difficult to defeat.
You have to wait for its guard to go down and then attack it (believe me - he does not drop his guard very often, and when he does it is only for a fraction of a second). If you are having a lot of difficulty and you have a lot of magic power, try using Din's Fire on it. Be warned - when you hit it, it will disappear and will reappear where you least expect it (very likely right behind you) and it will try to surprise you with an attack right in your back. Keeping this in mind, you should constantly be rotating when the Dark Link has briefly disappeared. If you do well, the Dark Link should eventually be defeated. When this happens, the illusion of the open endless room will disappear and I think this is the place in which you receive the longshot. This is a very useful item - you will need it to get the Boss' Key and to reach the Boss' Lair. With the longshot now in your possession, explore all of those rooms that you may not have been able to reach. There is another place that is far into the level where you will see a switch on the floor that raises the water level in the room. However, when you step off of the switch, the water will drop back down. In this room there are two walls that you can detonate bombs near which will reveal that the little edge that you are walking on continues around for a bit.
If you follow this edge, you will come to a large block. With a combination of both pushing and pulling, you should eventually push the block on top of the switch. This will hold down the switch and allow you to go to the next room when the water level rises. The boss of the level is not that difficult. It attacks with a long tentacle. If the tentacle grabs you, it will throw you around, causing a decent bit of damage. The trick is to keep moving to dodge the tentacle. Every once in a while, that pink thing will come floating up within the tentacle. When this happens, target it with your Z-targeting and fire the longshot at it. You will pull the pink thing out and when you do this, slash at it with your sword like mad. It will jump back into the water and start up its attack again.
If you repeat this procedure, it will eventually start to attack with more tentacles. When this happens, you really have to keep moving and attack the pink thing quickly and mercilessly. If you keep doing this, you will defeat it. When this happens, pick up the heart container and enter the glowing light. You will be brought to the Chamber of Sages where it will be revealed that Princess Ruto is the Sage of the Water Temple. She will entrust you with the Water Medallion. The next stop in your travels should be Kakariko Village and then the Bottom of the Well, which is covered in the next section...
Proceed to The bottom of the well...