Walk up to the middle statue to use the key you found in the forest. This will open the way for you to enter the dungeon. From the entrance go left and you will see two Hardhat Beetles. Use your sword to knock them off the edge and you will get a key. Continue left and you will be in a room with four Zols. Kill them with your sword to open the door that closed behind you and then collect the compass from the treasure chest. The compass will sound when you enter a room with a key, making them easier to find.
Now, backtrack to the entrance. Go up and you will be in a room with two Gels and a Hardhat Beetle. The Gels can't hurt you but they can latch on to you and slow you down. Kill them with your sword and knock the Hardhat Beetle down into a hole. Step on the button to reveal a treasure chest containing a key.
From there, go right and defeat all the enemies for a map. Walk up to the person-shaped portion of the wall which will swing you to the next room. There isn't much to do here, so unlock the door and head right. From this room, go up and you will see three enemies with playing card suits on them, the Three-of-a-Kind. When you hit them with your sword, they stop on the suit they are currently showing. Freeze them all at the same suit for a treasure chest containing a Stone Beak. This allows the Owl Statues to give you advice.
Backtrack two rooms and this time head for the left room. Inside of the chest in this room is a key. You have to be quick because of the Spark moving around it. You will be able to defeat these when you have the boomerang, but that is much later in the game. Continue left, because going up leads to a dead end.
In this room you will see a cracked wall, if you have bombs already you can bomb that area and in the room it leads to, receive a Secret Seashell. Otherwise, just defeat the Mini-Moldorm to receive 50 rupees. You can break the crystals with your sword to go down, but that just leads to somewhere you've already been. For now, go upwards instead.
In this room, you see a Blade Trap that will slide towards you if you try to go for the next room. Push the block into its way so that it can't slide at you when you try to cross.
From here, you have to zig-zag a little bit. Continue along the narrow walkway while avoiding the Sparks. Eventually, you will come to a closed door. Push the leftmost block right to open it, keeping in mind that the Spark will start moving around the block once you've pushed it.
Now you will find yourself in a room with two Spiked Beetles. Let them ram into you when you have your shield up to flip them over and attack their underbelly with your sword. You can now descend the staircase that appears.
You are now in sort of platformer environment. You can see Goombas moving at the bottom. Simply walk off the left ledge to fall to the next and walk off that and climb the ladder you fall near. Just keep doing this while working your way across and you'll eventually come up in another room. From this room, go up and you will see a flying heart. You can get this soon. Go up again and while avoiding the sliding Blade Traps, grab the treasure chest for the Roc's Feather, which allows you to jump.
You'll have to head back a fair bit now. Go back to the room just before the one with a bombable wall. Take the upper right way out. Continue along until you come to a room with a Hardhat Beetle. Knock it down the hole and jump across. Use a key on the block and continue to get the Nightmare Key. Now go back to the room just before the one where you got the beak. Jump across the hole and be ready for a mini-boss, and have the Roc's Feather with you.
The mini-boss of Tail Cave is Rolling Bones. He will roll a spiked bar at you and hide behind it. You simply need to jump over the bar and slash at him as he works his way across the room. It shouldn't take long to wear him down. Your health will be fully restored upon defeating him by a fairy and a warp point will appear, allowing a quicker path between this room and the dungeon's entrance.
Continue up to the next room. Be careful not to get hit by the sliding Blade Traps that will attack anything near the edge of the room. Don't bother going down the stairs, they are only needed if the Nightmare ahead knocks you down.
Tail Beast: Moldorm
In this room you will encounter your first Nightmare: Moldorm. The Nightmare is fairly straightforward. Moldorm scuttles around his lair, trying to catch you off guard. The only problem is, he can clobber your health in moments if you keep getting struck by him. Keep Roc's Feather handy to jump over the malicious worm.
The real challenge is taking Moldorm down. His lair has no walls surrounding it, and you can be sent flying if you make contact with him. If Moldorm knocks you down below, you can just work your way along and come up at the staircase before you fought him. However, his health will be refilled again if this is the case. To damage him, simply attack the sparkling end of his tail.This is where things get hectic: Moldorm will speed up for a few seconds and charge across his lair. An easy way to defeat him is with Spin Attacks, since you only need 2 of those. Make sure you don't get knocked down, though. After about four hits from your sword, he will fall. Collect the 'Heart Container he drops. You'll get an instant refill of health, and receive a fourth heart in your Health Meter.
After this hard-fought battle, you have a reward waiting in the next room. The door will lock, meaning no turning back. Go on to collect the Full Moon Cello, your first Instrument of the Sirens.
And that's it, you've completed Tail Cave. However, you'll be warped out of the dungeon and given a hint to the location of the next. The swamp seems quite peculiar...