Upon entering the Lighthouse, you will see Mia standing at the door, talking about Alex and how the entrance is blocked by a statue. After using Move on the statue, she will open the door and dash in.
All the dungeons before now are rather trivial in comparison to the Lighthouse. All of the lighthouses tend to be complex, though. The first obstacle in your (and Mia's) way is a Lizard man. You must fight and defeat him. Mia nods her thanks and runs ahead again. Pass through the door after her, and then through two more rooms until you are standing at the foot of a staircase; go up it. Again, you will see Mia's course blocked by an obstacle she can't move. After using Move on another statue, she will finally admit she can't go through this on her own and join you.
After passing through another empty room, you will come across a room with pipes carrying water running around the floor. Most of these have breaks in the line, which can be repaired by pushing a loose pipe. This is the first thing you need to do; once that is done, follow the maze and use the stairs to pass under pipes until you end up on the far right wall. Head north, and then take a longer staircase under four pipes at the north wall. You'll come out near where you started, but in a position to push the pipe back out; this will enable you to walk through the room without getting pushed every which way by water jets. Go down the same path again, this time stopping to grab the now-available treasure chest. Now, keep going until you return to the broken segment, travel left and then south. Walk down the stairs, under one pipe, and then back up. This should lead you to a doorway on the south wall, in the left corner.
Move south along the right wall, jumping over two pits, and keep going until you hit the southernmost wall. Travel left from here. You will see a statue on one side of a hole, and a button on the other. Move the statue onto the button to open the door. Once this is done, slide down the wall, go through the doorway facing north, climb the ladder and enter the next room. In here, just walk around and slide off the wall into the hole. You will land in the first room, but on a platform in the middle of the water. Jump the northern wall, towards a statue. Use Ply on the statue, and now every time you reach a platform in the middle of the water, you will be able to walk across the water for 3 jumps. Go through the right door and into the next room. In here, jump onto the platform in the water and move right all three jumps. Go onto the land and pass through another southern door.
In here is a treasure chest; at least by first impression. In actuality, it's a Mimic, a monster that looks like a chest. Mimic knows Sleep, so be careful of your party's status. They can be challenging, but often drop good things, so it's worthwhile. Once it has been defeated (or ignored), pass through the waterfall on the right by pushing up against it. You should pass through, into a room with a treasure chest. Use the platform's jumps to move three space out and reach the platform. It contains Psynergy armor, a good equipment for Isaac and Garet. Jump back across and return to the second room, after the statue. Go through the center door, near the staircase that took you up, but now use the 3 jumps to get to new areas. Move 3 spaces right, then down to the next platform to recharge. Go 3 spaces right again, once more landing on a space to recharge. Head north 4 spaces, landing on yet another recharging platform. 3 more north will take you to an area with many platforms, some recharging and others not. Move two to the left until you are on a non-recharging platform, then jump down one to stand on a recharger. Go left 3 spaces onto a normal platform, then jump over two to reach solid land and collect a treasure chest. Use the nearest recharging platform to move back to the starting platforms. Retrace the route to reach the northern corner. This time, head one to the left and 3 up to reach a safe spot. Use the nearest recharger to jump all the way across the shore on the left side, and then travel south until you reach that recharger. Go south 4 spots, and then through the door. Go on one recharger platform in the new room, but jump ahead to the next safe area, and through another door.
In this room, there should be three waterfalls, oriented opposite the way the mimic's room was. Press up against the center waterfall to go to another room. Nothing you can do in here yet, so just go into the one door you can enter on the right. In here are three pipe segments out of place; push the northernmost horizontal one into place, then the southernmost horizontal pipe, and finally the vertical pipe. This will fill the previous room with water, and cause the recharger platforms there to activate, enabling you to cross to the right door. Move three spaces left, then north to reach the staircase here. Next room is empty except another staircase, so just climb away. In this third room is a button, and an area limiting the movement of a statue, but no statue. The button locks a door that blocks your way, so you're going to have to find that statue. Head up the staircase on the opposite side. Here are several pipes, and they are all sealing the statue in the center. You won't be able to reach it, so you can't directly push it, and it's much too far away to use Psynergy on. However, the water jets from the pipes might just allow you to push the statue into the hole in the floor. Move all the way north in the room and then right, going under all the pipes and coming up on the other side. Push the segment as far left as it will go, which will slide the statue one square to the left. Go back to the left side and push the pipe segment to its original position to slide the statue down two spots, in front of the last water jet. Return to the right side of the room, and push the pipe segment back to left again. Now, push the horizontal pipe segment south as far as it will go. Return to the left side of the room one last time to push the vertical pipe segment to the right, which is now blocked by the horizontal one. This activates the final water jet and pushes the statue through the hole.
Go back down stairs and move the statue onto the button. Pass through the newly unlocked door into a room with several movable statues against the wall. Push the second from the right wall to reveal a door leading to a treasure chest (which contains a nut). Grab it, and go back. Jump across the broken floor, moving south, climb down the ladder, go right a few feet, up the next ladder, and then after going as far north as possible Move one last statue to reveal the doorway. In the next room, push a horizontal pipe segment to activate a water jet. This pushes the whole wall away, revealing yet another door. In this room are several waterfalls. Enter the fourth from the right, and you'll find the Mercury Djinni Sleet, which you must fight. If it runs away, just exit the room and come back; he'll reappear and you can challenge him again. This will make the second Mercury Djinn you have, the first being Fizz which Mia came with. Go back out and move left until you see a door in the south wall. Enter, and move to the next staircase in this empty room. The next room is essentially the same, except there are a few holes in the ground which you must jump over. Going into the door in this room is leads to another waterfall room; the hidden door here is on the one farthest right.
The next room is simple, and contains one jump and a statue which must be Moved one left. Behind it is a staircase, leading to another empty room. The door at the end of this room leads to a rainbow chamber; It's recommended to save now, since many things are about to happen. Use Ply on the statue here, and the waterfall will reverse direction. During a cutscene, you will ascend to the sky on it.
By the time your party arrives, Saturos and Menardi have already lit the Mercury Lighthouse's beacon. A rather lengthy cutscene ensues where the two parties taunt each other. Menardi takes Felix, Jenna, and Kraden away, and Saturos starts a fight.
Boss Battle: Saturos
Saturos is very tough, and his fire elemental attacks wreck havoc upon your party. Of particular danger is Fireball, a mob attack that can hit several members at once. Since you only have healing moves that can work on one person at a time, it means you waste a lot of time healing. He does have a weakness to water, so try hard to keep Mia alive (though her extremely low HP doesn't make this easy.) You should put Ivan and Mia on either end, since they have the least HP; that way, Fireball can only hit one of them at a time, not both, leaving you with only one character in dire need of healing. Take full advantage of your Djinn and summons, especially the Mercury ones you have gathered.
After he is defeated, Alex will come out and explain that the water power of Mercury Lighthouse's beacon weakened Saturos greatly, and that is the only reason they were able to win. Mia realizes this is true, seeing as her own power had been boosted. Alex does compliment your skills, however, while stalling for Saturos regain enough strength to walk. They escape down the newly activated elevators. You must go down the elevator to the Lighthouse's base, where the Water of Hermes, with mythical healing properties, has begun flowing again. Use the Empty Bottle to gather some water in it. With the waters flowing again, the people of Imil will no longer need Mia's powers, so she agrees to accompany you on the rest of the journey.
Before going on, check back in Imil for extra information on your quest. (read the spoiler tag.)