You start in a tunnel. Go out into the open, where there's a catapult. First fight the archer, and then you'll see the sheep flying over the wall. There's a door in the wall, but it doesn't open - so how do you get in? Remember the sheep? Climb onto the catapult and jump or swing your sword to activate it. As you go sailing through the air look down. When you are directly over the wall press your "backpedal" key. This will halt your forward velocity and hopefully drop you on top of the wall. This may take a little practice at first, but after you've done it enough times it becomes easy enough.
When on the wall, jump down to the other side and run back to the door and open it. You're going to need for that door to be open later. Run around in the big courtyard until you get tired and then head through the tunnel. On the other side you'll notice a wall with an area broken out which will let you get through. Go into this area and collect all the goodies. You can also practice your speed-strafe jumping in this area to get onto the ledge in this room, but there's not much up there.
After getting all the power-ups head back out and open the big door in front of you. This will give you access to the castle but the drawbridge is raised, so you can't get in. That's okay because you don't want in just quite yet. Jump into the water to the left of the drawbridge and swim through the main tunnel until you can reach air again.
You may have to deal with some hydras while in the water. A nifty way to kill hydras is to lure them after you, then retreat back to dry land. As the Hydra lies idle at the surface of the water, jump exactly on its back and whack it with the sword. It won't be able to fight back.
Climb out of the moat onto dry land and jump up to the hillside above, dispatching of the Archers. Stand right over the strange human corpse and look straight ahead at the castle. You should be able to see the Mill Key. Remember where it is, because that key is your next goal.
Swim back though the tunnels but keep your eye out for a small grating on the left that's not quite wide enough to fit through. Strike the grating with your sword to break off enough pieces to widen it, or use the "duck" command to squeeze through. As you swim through this tunnel take the first right and swim up towards air. Hack away at the walls to get out into the room and exterminate the Spiders waiting to ambush you.
Now run down the hall leading out of this room and take a right. Watch out for the arrows from the auto-crossbow! Immediately take a left up some stairs and then another right and another right again until you reach the auto-crossbow. Use your Vorpal Sword to chop up the auto-crossbow, then head back the way you came. Take the first right which should lead you into a room full of cots. Exit that room into another room which has a sword rack against the wall.
Look at the wall beside the swords and you should see a section of wall where the textures don't line up. Attack this area of the wall and a door will open up. Don't go in there just yet though. You need to do some housekeeping first. From the secret door look to your left and you should see another room with a ramp. Go up the ramp and turn to your left when you reach the top. Activate the switch which lowers the drawbridge. Even though this isn't absolutely necessary it will help speed thing up later on.
Now go back to the secret door. At the top you will see another giant crossbow, but this one is friendly. Step on the plate beside it to take control of the crossbow. Once you are in control use your mouse to position the sight on the tower. Start firing away. After four or five shots the old tower should come crumbling down, revealing a teleporter. Just for fun you can shoot the trees and watch them explode too.
Jump down from the from your firing position and make your way to the teleporter. The teleporter will take you to that small area we saw earlier that contains the Mill Key and a few other power-ups including the Chaos Sphere. Now that we have the Mill Key we have to find the Mill. It just so happens the Mill is located in the first level. To make a long trip short, use the Chaos Sphere to teleport yourself all the way back to the beginning of the level. Head back through the door into Marshland again.