Meridia will command you to find a beacon for her. Once you accept the quest and check out the map, you’ll see that the beacon is at the Lost Knife Hideout, just south of Fort Amol and north of the small town of Ivarstead.
Head inside the cave once you find it. Inside will be two bandits talking up ahead, so jump them. Note that one of them has a key. Further in are several more bandits, and down below is a lake. When I played, there were a couple of bandits swimming down there, which makes sense since there appears to be a diving board too! Ha! You can also find a TWO HANDED SKILLBOOK called “Words and Philosphy” on the table here. Kill them all, grab the book, and continue forward.
Watch out for a trip wire as you to. As you ascend the ledge on the left, note that there’s a path behind you (the planks) that leads to some more bandits and a room with a chest. In front of you is two MORE bandits. Man, this place is infested! Kill them and take the right exit to a loading screen.
In here you can sneak forwards and listen to some bandits complain about their boss. Go in and kill them (there’s three in this area) and head to the back where you can find a chest down on the right. Take the stairs up and kill the bandits here (they may be sleeping), but be sure to check the table for a HEAVY ARMOR SKILLBOOK called “Orsinium and the Orcs”. Head onwards past the wooden bridge and you’ll find a chest in an alcove on the left.
Now from here I’d recommend turning around and dropping through the floor where the water is gushing through. There’s a MASTER CHEST here (unlock it if you can) and it leads to the same place the upper path does: the room full of cages. As tempting as it might be (and, I should note, the key you got earlier UNLOCKS these cages), I DON’T recommend opening the saber cat cage. I can almost guarantee it’ll attack YOU instead of the bandit. Go forth and kill the bandit, the search the chest behind him. You’ll find the beacon inside of it. Once you have the beacon, Meridia will tell you to come back to her.
From here, clean out the cave of bandits (there’s about 5-6 more left) and continue FORWARD. It’ll load you into the first section of the cave, high above the water (there’s a chest to the left here). You can get to the exit easily this way.
Once you’re back at the world map, go teleport back to the Statue to Meridia. Once you put the gem back on the pedestal, you’ll be whisked away to go talk to Meridia HIGH above Skyrim. Whee! She will task you with cleansing her temple and destroying Malkoran. She’ll also want you to reclaim an artifact called Dawnbreaker (a cool name). Once you’re safely on land again, follow the objective and enter the temple.
In here, loot the corpses (not a good sign) and head down until you see a door on the left. Pick the door so you can get to a lever, which opens the gate on the right hiding a chest. Loot it and head forward. Wow, Meridia sure wasn’t lying: this place is in shambles. Interact with the light pedestal here to unlock the way forward. Past the door you’ll finally meet some enemies: corrupted shades. They are pretty much just like dead, ghostly versions of generic soldiers. Take them out and continue, hitting another light pedestal.
Now, THIS tricky pedestal opens up another set of doors, but don’t waste your time as the doors lead to a dead-end. Instead, go through a tunnel to the south to continue. You’ll fight more shades here, go through two wooden doors, and loot a chest before coming to the next big room. In here, kill the two shades lurking about and loot thoroughly. There’s an EXPERT door up above that houses a lever to get to a chest. Once you’re done, hit the pedestal and continue to “Kilkreath Balcony”. You’ll be outside again, just high up on the ruins. Unlock the EXPERT level chest here and head back into the ruins using a higher door.
Head inwards and you’ll see walk ways above you. Clear out the bottom floor here before heading up (there are three shades down here). Hit the next light pedestal when you’re ready and go through the open door behind you. There’s a shade down here and a chest. There’s also a door on the right that you should open, but immediately jump back from (there’s a floor trap here). Loot it and go through the left path. Watch out for a tripwire and hit the lever at the end. Walk down the walkway now and kill another shade at the end. Explore carefully here, as the corner has a chest and a BLOCK SKILLBOOK entitled “Battle of Red Mountain”. Hit the light pedestal now and continue.
In the next room there’s two more shades, with paths going up to the left and right. Go to the left first. There’s a potion on a pedestal here, but if you remove it spears will come out at your head. You can remove it safely as long as you aren’t facing it head-on. Now go up the right steps and continue out to another light pedestal. Activate it to open the door at the very bottom, then drop down (use the walkways, don’t drop ALL the way down just to be save) and continue on to the Kilkreath Catacombs.
Head forwards now and before long you’ll see a big room at the bottom of some stairs. When you get near it, your objective will be to “Kill Malkoran”. He’s in here with 4-5 shades and a TON of corpses. He’s a necromancer, so be ready for ice spells and buff yourself up before going in (you can also choose to use the door to funnel the enemies through, just beware of ranged bow and magic attacks). Once he’s dead loot everything in here (everything) and go up to the pedestal and interact with it to retrieve Dawnbreaker.
You’ll find yourself up high in the sky again. She’ll thank you and tell you to keep Dawnbreaker and purge the darkness from the land. Agree to carry it in her name and you’ll soon be back on solid ground with a unique sword for your own (it looks pretty neat too and is, as you would expect, magically enchanted to kill the undead). That is the end of this quest.