Blue Dragon's Cave
Upon arriving at the Lake, your party splits into 3 groups. Kyle and Jessica sit down to the left, Nash and Mia to the right, and Alex and Nall in the middle...sheesh, sounds like a swingers party. hehe. Anyway, talk with Kyle or Jessica (the dialouge is different depending on who you talk to first) and they try to sing. Jessica does half-way decent, but Kyle sounds worse than the music that was playing before you fixed the Lyton Cave shrine. They sit back down. Try talking with Nash or Mia, (again the conversation differs as per your choice) and they attempt to sing as well. Thier attempt is equally as bad and they sit down in the same fashion. Alex gets worried and walks up to the edge to the Lake. When it pops up, choose "I...I'll play our song." and Alex will jam out a song on his ocarina, which happens to be the one they were practicing at the beginning of the game.
Even though Luna is imprisioned far, far, far away in the Frontier, she hears your song in her heart and starts to sing. Soon, all her cellmates are singing with her. When this happens, the 3 Wtiches show up to quell the singing, but strangely, Phacia exhibits some humanity and scolds her sisters. As they squabble, the screen slowly fades to Ghaleon watching Luna sing and he babbles about Luna being "the one". Oddeth. In the meantime, the song finishes and the Blue Dragon's Shrine rises out of Lyton Lake. Your party assembles, and then enters the cave. Make sure you heal up and save first though once inside. The enemies here can be rather brutal.
The cave itself is connected by magical whirlpools, however, some of these are traps and there is no way to tell until it is too late, so pay attention closely to the following strategy to getting through the Blue Dragon Cave alive.
From the entrance, walk up to the whirlpool and watch the party get baffled and and then enter the whirlpool. You emerge in a very small section of the 2nd floor, so walk east a few steps and hop into the next whirlpool. This takes you to the rest of floor 2. You emerge next to another whirlpool. Avoid it like the plague since it is a trap and head west. You will eventually come to a clearing with 3 more pools. The bottom two are traps, so take the top one after getting the nearby chest for an Angel's Tear.
Not much to do on this next floor. Just walk up to the western pool and take it. This will bring you to another small floor. Head east (nothing in the passage to the north except a dead end) and you'll come upon 3 more pools. Take the one in the middle. You'll emerge on another floor next to another pool. Avoid that one and head west. You'll find another clearing with another pool. Take this pool after grabbing the chest directly south from it to acquire 5000 S.
After taking the last pool, you'll find yourself on the main floor of the cave. From the pool you just came out of, head west, but take the southern path instead of the northern one. This will land you a Ruby Tiara for Jessica with minimal fuss. Head back the way you came and when you reach the pool, head east. Just off to your north will be a chest with an Angel's Ring. Nab it and continue east. The path will eventually let you go north, so go north and you'll find 7 pools. The one you want to take is in the bottom row and is second from the left. Take this, and you'll find yourself in another room on yet another floor.
In this room, there will be 2 pools to your left. Disregard those and head northeast along the path. It is pretty straightforward since it makes a rather big loop in a counter-clockwise fashion. You'll emerge in a clearing again and head south to find 2 chests containing a Jewel Bracelet for Nash and a Chira's Tail, respectively. Once you have these 2 goodies head northwest to find a lone pool. Hop in it. Once you emerge, head west. Grab the chest nearby for a Dragon Armlet for Mia, and then continue west and through the door in the west wall to enter the Blue Dragon's Lair.
Walk forward in the dark chamber until you awaken and meet the Blue Dragon. He is a fairly easy going, laid-back kinda of Dragon. Listen to him ramble, particularily about how he was awakened and how Althena couldn't do that anymore...odd. But before you can ask, he sends you off to the side room to claim the Blue Dragon Helmet. Once you take it, you hear a commotion in the other room and you rush in to see that Phacia has enslaved the poor Blue Dragon. She at least offers some attempt at sanity for an explanation and then warps the heck out. And then just when you think all is clear, the Blue Dragon's Spirit appears and babbles about how he knows what is going on and he begs Alex to hurry and complete his quest before all is lost. When his spirit fades, and you try to leave, Nash turns into the ultimate whine bag. Listen to his wussiness, and leave the cave in your prefered method of travel.