Floating Islands

You'll appear on an island floating in the middle of nothing (actually it's a big square chamber, but you've got to fly up and down the walls to see it on the automap). Right next to you is a statue. Clicking on its head will cast levitate on you. Look up and you'll see an island floating above you. Fly up to it and pull the lever. Now fly down below the starting island (kill the Daedra Seducer if you want to) to an island with four doors on it.
The doors are not attached to anything, they're just doors standing up, but there is a Frost Daedra waiting for you. Click on the south door (and only the south door). Now go to the east edge of the island. Fly down a little bit and face west. You'll see a room in the rock with a lever in it. Go in and pull it.
Come back out, face west, and fly over to the west wall (you'll need to look at the automap to see when you've hit it). Face south and float up. You'll see an opening near the top. Go through the opening, down the hall, and up the shaft at the end. Follow the corridor north. If you go left at the junction, you'll come to a room with a couple of minor critters in it. If you go right at the junction, you'll come to a room with a treasure pile in it. If you go straight (the way you need to go), you'll pass an opening with blue bars over it and see a lever at the end of the corridor. Pull it and the blue bars will be gone.
Go through the opening and pull the second lever you come to. Keep going and pull the third. Don't pull the first because you'll have to come back and pull it again to reopen the passage.
Go to the end of the passage and pull the fourth lever.
Now, go back to the island with the statue. Go to the north side and fly down a little and face south. You'll see another chamber in the rock with a Daedra Lord in it.
Dispose of the Daedra Lord (if you didn't do it earlier) and step on the carpet to be teleported to the next section.

As an aside, if you managed to knock anything off of its perch and want to hunt it down and kill it, you'll find them on the floor of the chamber (assuming it survived the fall, which they almost always do).

From Jormungandr (16 March 2006): You start on the island. Click on the statue and it will cast levitation on you (isn't that nice?). Quickly fly up and pull the lever on the island floating above you, and then down below to the island with the doors. Pull the south door, and then fly off the west edge of the island, floating down until you see a chamber. Enter and pull the lever. Be quick about this! Quickly fly back up to the starting location with the statue. Your levitation should be wearing off now; when it does, click on the statue until it recasts the spell.

Now, high up to the south west, you'll see an opening. Fly up and enter it. Fly up the shaft, follow the tunnel, and pull the appropriate levers. Don't worry if you levitation wears off; it will, but you don't need it anymore. Return the way you came (just fall down the shaft, you'll live), but stop before entering the main chamber.

If you stand at the threshold and point yourself at the starting island, you should be able to run and fall onto it (jumping might over do it, so be careful). Now you can follow the "staircase" that leads down from the edge of the island and enter the chamber that is inside the starting island. Step on the carpet and enter the next section.