Praise the sun. Our Dark Souls Walkthrough provides tips for surviving the adventure, a guide to the entire world, and hints for slaying bosses.
You'll arrive in Ash Lake only after descending through The Great Hollow, itself accessible from the edge of Blighttown's lowest level (in the direction opposite where you find Quelaag's cavern).
From the entrance, start forward along the gray path and you'll arrive on a tree limb overlooking a blue expanse. That is the lake, naturally.
Continue left along the tree limb to find a place where you'll walk along a half-pipe of sorts, fashioned from tree bark. As you descend, you'll come to a sandy base and ahead you'll see a hydra in the water. Instead of immediately approaching, turn sharply right and head along the sand in the opposite direction of the hydra. There, you'll find a bonfire that you can light and kindle. Then when you're ready, turn and head back to the hydra.
There are two options in dealing with the hydra. You can either fight it or you can run past it. Fighting is a risky option, but it also requires a lot of stamina to just run past it. Sometimes if you try to fight the hydra, it will pull a stupid and kill itself. Since you're near a bonfire and don't have to backtrack far if you fail, it might be worth just trying to kill the beast.
Whether you decide to try to fight the hydra or just to avoid it, note that you can't safely head far from the shore. If you step into the deep water, you'll plunge into its depths, sliding along the bank to your watery death. Therefore, you want to lure the hydra to a safe point along the sandy ground and fight it where you have the most safe footing. You can head around the huge tree near the bonfire and along the far side, you'll find a Dragon Scale resting on a corpse near the water. You can also head toward the right along the beach and find another Dragon Scale in the shelter of a hollowed out log. That log is one good point of shelter if you decide to battle the hydra, though it can't block every attack if you're standing near its edge. Just beyond the hollowed out log, the beach widens.
You can keep running along that beach, past a huge tree where a cursed frog and a large walking mushroom will attack you if you try to enter. You can battle the frog and the mushroom and defeat them with fire attacks (particularly the agile frog) and melee attacks as needed. Around the back side of the tree, outside where you're looking at water, there's a point where you can drop to a lower ledge of bark. There, you will find a trail that leads back into the tree so that you can grab the Great Magic Barrier miracle from a corpse.
Not far beyond that point, there's a bar of sand that follows a wavy pattern. If you manage to run all the way along it, you can finally enter a forested area that the hydra can't enter. There, you'll find another bonfire. Just past the bonfire, you can approach a huge dragon and kneel before him for the opportunity to enter his covenant. If you agree to do so, you'll receive the Dragon Eye and the Dragon Head Stone. You are also permitted to offer dragon scales to deepen your covenant. Your level within the covenant won't go up unless you offer at least 10 scales, though, so don't start offering them unless you have that many to spare.
When you're done with any covenant business, go ahead and return the way you came. It's time to ascend through the Great Hollow area again and resume your regularly-scheduled adventure. If you're having trouble making the climb, we offer some tips at the end of that section in this walkthrough.