Speak with the Elder
Go to the house all the way at the North end of the town. Inside that building speak with the elder. He will discuss the attack Cecil perpetrated on their town earlier, and tell you to go to Mt. Ordeals and become a Paladin. He will have Palom and Porom assist you on your quest. Leave the town.
Locate Mt. Ordeals
From Mysidia go east. Keep heading east until you reach a point where a circle of forest is around a cluster of mountains in the middle. Go up the path in those mountains, and you will be at Mt. Ordeals.
Up the Mountain
At the entrance, Palom will use the Ice spell to remove the Fire blocking the way. A cut scene will reveal Rosa tied up thanks to Kain and Golbez. Continue up the mountain. When you reach the 3rd Station, you find Tellah, who will rejoin your party.
Summit
Continue climbing the mountain until you reach the summit. At this point you should use a tent at the save point and save your game. After saving, continue up the mountain, and cross the bridge on the left. When crossing, you will be entered into a battle.
Milon Pt. 1
Kill off the Ghasts using either fire or cure spells. Physical attacks are ineffective against them. For fighting Milon, Cecil can attack with his sword and let Palom and Tellah use Fire Magic, his weakness. He should be defeated easily using these methods.
Milon Pt. 2
Before continuing across the bridge, you should go back and use a tent and save because another battle awaits you on the way back. For this fight, the strategy remains the same. Have Cecil attack with his sword, and Tellah use his Fire magic. Palom and Porom's twin magic is fairly effective, or you can use Palom's fire magic and Porom to heal.
Fight Yourself
After defeating Milon the second time, walk up to the stone arrangement, and you will be pulled inside. After becoming a Paladin you must fight your old self. In this battle you must not actually fight. Keep selecting cover and off, so that you don't attack. He will eventually quit and you will be able to leave Mt. Ordeals.
Return to Mysidia
Before leaving, Tellah will recall all the spells he had forgotten. Climb down the mountain the same way you came. The easiest way to return to Mysidia is to ride a chocobo. There is a clearing with a circular pattern of trees to the southwest after you leave Mt. Ordeals. Enter these trees and choose one of the yellow chocobos and ride him back to Mysidia.
Enter Serpent Road
Upon Returning to Mysidia speak to the elder again. He will tell you the legend and open the serpent road. It is located in the building at the right immediately outside the elder's building. Enter the serpent road and you will be brought back to Baron.