Go up the stairs and talk to Mia. Once she's done talking, go up the ledge to the right of the statue and use Move to move the statue out of the way revealing a portal. We now learn that Mia is an adept and part of the Mercury clan. Using Ply Mia opens the door and you're now free to follow her. Go up to the large lizard blocking Mia's way, press A and get ready for a battle. The Lizard Man isn't anything to worry about, he's just a little stronger than your standard enemy. Head the either door in the next room, and then the door in the center in the following room. Now, jump across the stone directly in front of you and go up the staircase. Down the hallway in this room you'll find Mia who once again has had her path stuck. Move the statue towards you to clear the boundary and have Mia join your party! Here's an interesting note about Mia: In this lighthouse she has infinite PP so feel free to use her Psynergy to the fullest extent. Hop over the statue and proceed to the next room to find several waterfalls. Unlike later waterfalls, you can't go through any of these so just move east and go through the door there. In this room you will find a series of pipes that roll just like logs, only this time you'll want to connect pipes to make water flow. Move the first vertical pipe that's in your way right to connect it and start the water flow. Now move down and then go down and then up the stair case. Go down again, and the around clockwise to another down-and-up staircase. Go all the way up the right wall to find yet another down-and-up staircase. Here you will find a discolored pipe on your left, so push that to your left. Go down and then through another staircase until you can finally go south to a door. Go directly down, jump the gap and then stay on the ledge (read: don't go down the ladder.) Go all the way around until you get to a statue. You'll notice a LONG dotted line path and a square on the other end. Taking about 57 seconds, push the statue all the way from where it originally was to the square on the western side. Once that's been dong, head back all the way from whence you came (6 I think) and head down the ladder. Travel back west once you're down the ladder, through door, up the ladder and into the next room. In the next room slide down into the hole to land in the middle of the room with water surrounding a plank and a goddess on the wall. Hop over the goddess and use Mia's Ply Psynergy on her. Now, jump back on the square.
Now that you're on this square you have a special power to jump 3 times over water, and then one last time to a safe place. So, jump to your right and then head up the door. From here go to the right, and using the water hopping ability you just got, jump over to a ledge and then down into the door. In this room there will be three waterfalls. In this room there will be a treasure chest in the right corner. Watch out! It contains a powerful Mimic! If you did get this chest, though, use your powerful one person attacks, Psynergies and your summons. While Mimic doesn't attack very hard, he has a ton of health and has the ability to drain PP from a character. When you beat him you'll get a handy Water of Life which will revive fallen characters. Any ways, head through the third waterfall by pressing up on it and across the water to get Psynergy Armor, which you should equip on a character. Head back out from whence you came (7) and into the center door. Hop onto the only square you can get onto, then move east making sure to end up on another square. Head east again, then go north. Continue along the side wall, remembering that you have exactly four hops to get where you want to go. Head counterclockwise around the corner, and then keep heading south until you reach a door. You'll end up to the left of the door where you entered the large room with all of the hopping. Head through the door and then through the center waterfall. Head straight the next door and into the door to the north. In this room go to the northern most horizontal pipe and push that up. Now, push the other horizontal pipe up, and then push the vertical pipe to the left. This will fill the water up in the other room, allowing you to now hop over the water using your water hopping ability. So, go back and hop over and go up the stairs. Head up the stairs twice, ignoring the switch. Head all of the way along the left wall, and go through the down-then-up staircase. The objective of this room is to push the statue with flowing water in the hole below. Push the discolored vertical pipe all the way to the left, then move the horizontal pipe so that the vertical pipe can only move back to the right once. Do so and get the water moving the statue in the first out of three directions. Now, move the horizontal pipe out of the way and push the vertical pipe all the way to the right. Finally, move the pipe back to the left and the statue will be dropped below onto the floor below. Head back from whence you came (8) all the way down the stairs and then push the statue onto the switch. Now, head through the open door. This room will have a series of statues that, surprise!, have hidden doors behind them. Head all the way to the right, then go down the ladder and up the ladder all the way to the right. Use Move Psynergy to move the statue here. Now, jump through the door and push the pipe into connection to reveal a door in this room. Head through this door to enter *another* waterfall room. Go through the 4th waterfall in this room to find another Djinn. This time you're going to have to battle, so save before you fight it. Watch out for this Djinn, because he has a very powerful Water of Life. Your best strategy is to throw everything you have at him as fast as you can before he can attack you very much. Once you beat him you'll get Sleet, a Wind Djinn.
Now, head to the west and through the door. Go down the hallway and go to the next room. Go down this hallway, and hop the gaps present. The next room has still more waterfalls, jeez. Go in the very last waterfall and go counterclockwise along the bottom and right walls in the new room you just got in. Move the statue using Psynergy, hop across and go up the staircase. Head down the hallway, and you'll end up a room or two later in front of a waterfall with a statue there. Use Ply on that statue to float up the waterfall and end up on the top of the statue. Note: Before going up this waterfall you may want to level up to around Level 9 or 10 as the upcoming boss is very difficult.
As soon as you can here, save. You'll also get a handy Psynergy Crystal, so heal up before you use that. Jump across the ledges and head up the stairs to find none other than Saturos, Jenna, Felix, Kraden and the rest. After some rambling back and forth Saturos will finally challenge you to a battle. Saturos is not going to be a pushover, so you're going to need to work out a good strategy to beat them. One good one that I used was to pummel Saturos with Flint/Summons with Isaac, use regular attacks and occasionally fire psynergy with Garret, use plasma and occasionally impact with Ivan, and keep using Ply with Mia. After a long time, you should be able to "fell" Saturos. Remember, his AI is pretty bad and you'll have some luck in keeping characters alive.
Once you finally defeat Saturos, it's revealed that no, it wasn't a fair battle and his powers were weekend by the Mercury Tower's strength. Don't worry, you don't have to fight him again (yet ;-]) After a particularly long and repetitive conversation, you'll finally be able to hitch a ride back down the light house. Also, Mia will permanently join your party! So, when you finally get command of your character again, head west and watch as the elevator comes back up. Hop across the stepping stones and onto the elevator that will take you down to the now overflowing fountain. This fountain water has the power to heal whomever it's used on, so the town no longer needs Mia. The water also has the power to heal Tret, so go up to the fountain and use your Empty Bottle item on it to fill it up. If you do not yet have the empty bottle, exit the Lighthouse and go to the house with the two sick old people in the southern part of Imil. The bottle is located in a chest in the northwest part of that house. If you for some reason dropped the empty bottle, I believe you can pick it up in the "Artifacts" menu in the Item Shop in Imil. Now that you have Herme's Water, save your game and head down and out of the Mercury Lighthouse. Congratulations, you've now beat this dungeon of sorts!