After this the key will fall into the cell. Pick it up and go near the entrance and press L1 to use it. Beware you have no weapons at this point so you will have to run and avoid damage until you get your weapons back.
S. E. E. W. S. N. N. S.
The statue faces East, so you know which direction is which.
If you push the wrong buttons in the sequence, wait a couple of seconds and restart the code.
You can't mess it up. The door WILL open when you input the correct code.
Inside is a swimming puzzle, one direction leads to a door in a cave with Wartoks and Frost Grull... the other leads to a room with a stone platform with columns surrounding a treasure chest at the center.
The chest contains Clineschmidt's Blade.... and the rest is self-explanatory.