The Elder Scrolls IV: Oblivion Guide - Main Quest Walkthrough
The Shrine of Dagon is located in the Lake Arrius Caverns, which is west of the Imperial City and north of Cheydinhal. You cannot fast travel directly to the cavern if you have not been there before. The shrine is marked on your map. Start by fast traveling to the Black Waterside Stables outside of Cheydinhal, since the caverns are just north of here.
Now it's just a short trek north to the caverns. When reach the caverns, use the wooden door to enter. Proceed further into the caverns until you reach a door that is sided by a pair of red Mythic Dawn banners. Approach the Doorkeeper to speak to him.
Speak to the Doorkeeper to gain access to the Mythic Dawn shrine in Lake Arrius Caverns.
Your goal once in this shrine is to retrieve the Amulet of Kings. There are essentially two ways to go about completing this quest. You can either convince the disciples that you are genuinely interested in joining the Mythic Dawn cult, or you can run into the shrine and bash some heads in. Going with the former is likely the better option, as there numerous cultists occupy the shrine. Unless your character is at a rather high level, you likely won't be able to handle all of them at the same time.
If you wish to go about doing things the violent way, doing so doesn't require much instruction. Just run in, kill everything that moves, grab the book, and be on your way.
Provided you wish to take the cautious route, read on. After speaking to the Doorkeeper, he will proceed to open the doors to the shrine. You'll encounter a Dark Elf named Harrow inside; he'll order you to hand over every item in your inventory. Harrow provides you with initiate Mythic Dawn robes.
Alternatively, before speaking to Harrow, you can drop all of your possessions outside, and then run over and retrieve them once you have the robes. It would be a good idea to at least drop your weapon and armour outside for combat purposes, but you will eventually get the other items in your inventory back.
If you refuse to hand over the contents of your inventory, Harrow will attack you, so it's best to comply. Follow Harrow into the Shrine Antechamber; continue following him and he will lead you to the Dagon Shrine. Once in the shrine, you will witness Mankar Camoran giving a speech to the cultists. The legendary Mysterium Xarxes lies on the pulpit in front of him! Do not touch this book just yet; sit back and allow Camoran to finish his speech.
Allow Mankar Camoran to finish his speech, and then speak to Ruma Camoran for further instructions.
When Camoran's speech concludes, he'll open up a portal and disappears into the Paradise realm. Unfortunately he takes the Amulet of Kings along with him. Don't worry, however, as there is nothing that you can do at this point. Camoran does leave behind the Mysterium Xarxes; this is your ticket to Paradise.
Once Camoran has left the shrine, Ruma Camoran will approach and initiate a conversation with you. She explains Mythic Dawn initiates are required to spill the blood of Lord Dagon's enemies upon the shrine. Agree to slay the sacrifice, even if you intend not to. If you refuse, the cult will attack. Grab the Silver Dagger that lies next to Mysterium Xarxes. Whether you kill the sacrifice or not does not matter, as the cultists will attack you as soon as you snatch the Mysterium Xarxes from the pulpit.
You can choose to free the prisoner; doing so could serve as a distraction, but the Mythic Dawn will likely ignore him and make a beeline for you instead. Have a healing spell or some other means of healing yourself ready before you make your move. It would be a good idea to save your game before doing anything else.
If you didn't drop your equipment outside before speaking Harrow, now is a good time to retrieve your belongings, as you'll surely need them to get through the brawl to ensue. Rather than killing or freeing the prisoner, it would probably be best to locate Harrow instead and quickly attack him with the Silver Dagger equipped. Retrieve your gear from his corpse, run up to the pulpit, grab the Mysterium Xarxes, and high-tail it out of there.
Locate Harrow, quickly kill him with the Silver Dagger and then loot his corpse to retrieve your gear.
You're going to have to run like a madman to make it out this one alive, unless you think you can take them all on at once. The path used to enter the shrine has been blocked off, so you have no choice but to find another way out. There happens to be another exit through the Living Quarters. The entrance to the Living Quarters is up on the hill to the left of the shrine. Head up the steps in the southwest corner of the shrine, turn right at the top, run past the red banners, and follow this path until you reach the door to the Living Quarters. You've got to move fast, as the cultists will surely follow you through the door.
Once in the Living Quarters, head straight and turn right as soon as you can. There are several Mythic Dawn Acolytes up ahead; pay them no heed and run past. Take a left, and then a right when you can; be sure not to head left instead, as doing so will lead you to dead end. Continue heading this way until you reach a large, open room.
Immediately run left and hop up the rocks to the reach higher ground. There are a couple of Acolytes up ahead, but they won't be able to jump up after you. Run along the upper level and head through the passage that you come to. There are several more cultists up ahead. Just continue running and casting healing spells.
Keep heading in this direction until you reach another room. Here, you can either keep running, or try to take out the cultists on your tail. If you don't have an adequate number of healing and/or magicka potions, run past the cultists and head through the passage to the right. Exit to the Shrine Antechamber, and make your stand here. The Acolytes will surely follow you, and if you quickly strike when they first appear, you should be able to kill each one. Once they've been taken care of exit back to the Living Quarters, head up the slope and exit to the Lake Arrius Caverns via the door at the top.
Taking on the cultists all at once is no easy task, so your best bet is to high-tail it out of there.
There's a Handle on the wall off to the left of this area. Use the Handle to lower the rock wall. Run past the rock wall, head down the middle of the area here, and exit the caverns through the same way you came in. If there are cultists still pursuing you, they will most likely follow you outside. It is easy enough to deal, provided they are not attacking you all at once.
The way out of the Shrine of Dagon
Now you must deliver the Mysterium Xarxes to Martin at Cloud Ruler Temple. Fast travel to Cloud Ruler Temple to speak to Jauffre. Afterwards, make your way to the Great Hall and bring present the book to Martin. He believes that the key to opening a portal to the Paradise realm lies within the pages of the Mysterium Xarxes, but he requires some time to study it.