After finding all of the Tears of Farore, you return to the forest with the Water Dragon's Scale. You can now swim underwater.
New Potion
Now that you have the Water Dragon's Scale, Luv in the Bazaar has started selling Air Potion, which makes your oxygen gauge last longer while swimming. Feel free to go get some before you proceed.
A Piece of Heart and a Silver Rupee
A Goddess Cube on Eldin Volcano, on the eastern side of the easternmost steep slope, unlocked a Goddess Cube Chest in a shed on Skyloft that you couldn't get into. Now that you have the Water Dragon's Scale, you can swim into a passageway in the lake in eastern Skyloft, under the windmill next to Kukiel's house, to enter that shed, where you can open the Goddess Cube Chest to get a Piece of Heart, and open the chest next to it to get a Silver Rupee, worth 100 rupees.
Upgrade the Sacred Shield
If you got any Dusk Relics in Farore's Sacred Realm, you might now have enough materials to upgrade the Sacred Shield, turning it into the Divine Shield.
Swim Into the Tree
There is a very large tree in the center of Faron Woods. There is water on the southeast side of the tree. Swim into that water and follow the on-screen instructions to swim underwater. Stay underwater to avoid the Quadro Baba up above. Get the Amber Relic here, if any. You will find an opening in the base of the tree underwater. Swim into it.
Reach the Top of the Great Tree
Swim through the underwater passage, and collect air bubbles to avoid drowning. There will be a brief cutscene when you reach the interior of the tree.
Swim to the vines in front of you and climb up. Run onto the wooden platform. You can use the Gust Bellows to make the platform swing around. Try to blow the Froaks into the Bokoblin to kill them.
Before you go toward the door in the west side of the tree, swing south and jump onto the ledge to the south. Climb clockwise around the ledges to reach some Keese, as well as a small cave in the northwest of the tree that isn't marked on the map. Follow the path and you will see a Quadro Baba up ahead. You can throw a bomb into its mouth to kill it. Then jump across the gap and open the treasure chest to get a Gold Rupee, worth 300 rupees.
Now go back the way that you came until you are above the exit in the west side of the tree. Jump down and go outside.
You will be on some platforms outside of the tree. Climb up. If you try to go to the Goddess Cube on the nearby root, you will have to swim back into the tree and climb back up to this spot, so you might want to wait until you have reached the Bird Statue up ahead so you can descend to it later and skip climbing the inside of the tree again.
Go up the ledges. You will reach some vines. Use the Slingshot or Beetle to get rid of the Walltula on the vines.
Jump across the gap in the vines, then go downward to the ledge below. You will start to hear a strange noise in this area. Use the Slingshot or Beetle to get rid of more Walltulas on the vines. You can also try to knock down the bee hive and catch the hornets with the Bug Net.
Continue climbing along the vines to reach another entrance into the tree. Go inside.
There is a Wooden Shield Moblin here. One way to get past it is to wait for it to rotate its shield and set the shield down, then while not targeting the Moblin, run up the shield and go through the exit past the Moblin. Another way is to use the Slingshot to hit its head and stun it, then hit it repeatedly with your sword while it is stunned. Just be prepared to run away and stun it again if the stun wears off.
Up ahead, save at the Bird Statue. Then go up the slope and kill the Bokoblins that attack. Be sure to get rid of the blue one to keep it from summoning others. Get the Amber Relics from the hollow spots to the left, if any. After you kill the Keese up ahead, walk up the ramp and Fi will mention the strange sound.
Before you proceed, you can try to get two more Goddess Cubes. One is on the southeast root of the Great Tree, and one is near the northeast side of the Great Tree. The southeast one can be obtained much more easily later, so you might want to skip it for now and just get the northeast one. Place a beacon on the spot where you need to land, to help position yourself. Then try to slowly approach the edge until you are prompted to Hang Down, and do so. Then while hanging down, press the indicated button to let go. If you positioned yourself correctly, you will fall to the desired spot. Use the Sailcloth to land safely.
From the top of the Great Tree, climb the vines at the top of the ramp and there will be a cutscene. Use the Slingshot or Beetle to wake up the Kikwi. (During his dialogue, he will say "It's a secret to everybody", which is a reference to the first Legend of Zelda game.) He will mark an area on your map.
Go back down the ramps of the tree until you can see the Viewing Platform down below. Jump off and use the Sailcloth to land safely.
Find the Completed Symbol
Go to the location on the Viewing Platform that is marked on your map, and you will see a symbol on the ground. Be sure to memorize its shape. Or you can go to the Pause menu and go to the Gear screen to see the same symbol next to your sword. It's a circle on the left, with a small crescent moon to the right, and a larger crescent moon to the right of that.
Open the Gate
The gate that the Kikwi Hermit showed you is in the very south of the area. From the Viewing Platform, go southwest until you reach the round pit of dirt south of the Great Tree. Go south from there and swing across the vine, then go south and swing across the rope. Kill the Quadro Baba, then go south and kill the two Octoroks.
The gate is to the south. While standing on the stone in front of the gate, point your sword upward to charge it up. Then follow the on screen instructions to draw. The symbol is incomplete: it has the two crescent moons, but not the circle. Draw the circle to the left of the crescent moons.
Reach the Water Dragon
Go through the gate and go to the end of the path. Jump off of the edge to enter Lake Floria. After the cutscene, you can allow the current to take you through the path, or you can swim to the end. There will be another cutscene. Follow the creature, a Parella whose name is Jellyf. When it goes through a gate, dash into the gate the same way that you would do a roll attack.
Continue following Jellyf. You will reach an area where the path to the next area is blocked by rocks. Do spin attacks into the Froaks to push them into the rocks. The Froaks will explode and break the rocks. There is a silver rupee, worth 100 rupees, under the rock in the middle of the floor. After you open the blocked passageway, the map will be updated. Continue following Jellyf.
You will reach a gate. To get over it, you have to do a spin jump. Jellyf won't help, so talk to the other Parella nearby to learn how. Just do a spin attack while swimming upward.
When Jellyf swims through a narrow gap in the rocks, use a spin jump to reach the area above the water there. Look for the nearby bird statue, and open the nearby chest to get a Goddess Plume. Then go south, west, and north to reach a Goddess Cube. It unlocks a chest in eastern Skyloft, on a floating island that you can't reach yet.
Go back into the water and continue following Jellyf. Up ahead, a fish will attack. Stun it with a spin attack when it charges toward you, then use another spin attack to kill it.
Follow Jellyf again. Jellyf will stop at a door. Swim up to Jellyf, who will then unlock the door. Go through. Climb onto the structure in the center and talk to the tiny dragon atop the statue.
Find the Sacred Water
Fi will add the Sacred Water as a dowsing target. If you don't have an empty bottle, you will need to empty one of your bottles. Before you exit, however, go around the room to find a blue chest on a ledge on the eastern side that contains a random treasure item. There is also a second blue chest on a ledge on the south side of this area with a Silver Rupee, worth 100 rupees, inside. You will need to do a spin jump to reach it.
Use the northwest exit to leave this area.
Strum the harp near the butterflies to find a Gossip Stone.
Go up the slope to the north of the Bird Statue, and you will end up in Faron Woods. Be sure to push the log off of the edge to give yourself a shortcut. The sacred water is in the Skyview Temple, so you might want to just go back to the sky, then dive back down at the green column of light and choose the Forest Temple Bird Statue.
If you would rather walk, then jump down where you pushed the log. There is a Wooden Shield Moblin. To kill it, you can cut apart its shield, or you can run up the shield after it rotates it and sets it down, then hit it from behind. Be sure to run away if it's about to swing the spear. After its shield is gone, just hit it with your sword until it dies. Run up the slope, and make your way northeast toward the dowsing signal.
Go into the Skyview Temple. You can't dowse for the Sacred Water while inside, but Fi will mark an X on your map. It's through the door that led to the boss of this dungeon. There are tougher enemies here now. As you descend through the first room, play the harp where you see three butterflies, to reveal a Goddess Wall. When standing in front of the Goddess Wall, charge up a Skyward Strike. You can draw various shapes on the wall to get different types of treasures. Check the Goddess Wall Guide for a list of shapes you can draw.
Across from the Goddess Wall, there is a shortcut to the room to the north. The door in the north is locked again. Go into the east side room. You can ignore the Staldra across the way. Swim underwater and crawl into the small gap on the east wall. On the other side, climb the vines and you will find the key in the dirt up ahead.
Return to the middle room and use the key on the locked door. Then go to the north side of the large room and go through the archway there. Stand behind something to shield yourself from the Bokoblins' arrows, then use the Beetle to drop a bomb onto the Bokoblins across the rope. Go across the rope. You don't need to unlock the door again, so just go through.
There are three Stalfos here. Pay attention to which way their swords are pointing to see the correct direction to slash the sword. You can use a Shield Bash to deflect their attacks. Keep backing away as you circle around the room, to avoid having to fight more than one of them at once.
After you get rid of the Stalfos, go through the door to the Skyward Shrine. Use dowsing here to locate the spot where you can find the Sacred Water. It's at the base of a waterfall, so stand in the waterfall and scoop with an empty bottle to get the Sacred Water. There is no time limit on the Sacred Water, so there is no need to hurry. You will automatically go back outside.
Return to the sky and then go back down to the green column, and return to the statue near the Floria Waterfall. Then you can walk east into the Water Dragon's chamber. Talk to her and she will open the waterfall for you.
Use a spin jump to get onto the ledge beyond where the waterfall was. Go inside to reach the Ancient Cistern.