I was just wondering if anyone had any ideas or if they knew how to lower the water in those areas, I know you can and I know you have to. I just don't know how. Soooo yeah, if anyone can help me, then thanks.
The secret to lowering the water in that whole area (main warp room, lighthouse, windmill, waterfall, lonely-tree island) lies in the weeping/puking waterfall area. The huge column in that area is what you should be paying attention to.
If you've played the game a lot you'd notice similar columns with similar codes inscribed onto them.
edit: What is Fez's alphabet? that might help you :)