Stony Creek Cave Stony Creek Cave is a cave located in that serves as an exit for the Dwemer ruin , Kagrenzel . It is located southeast of Windhelm and north of Ansilvund . Walkthrough . The entrance is on the east side of a pool of water . The path is partially submerged and leads to the southeast . The first open area has a Breton lying over a pole . The path continues upstream to the southeast , then turns left ( northeast ) where eventually two bandits will appear . On the right hand side further up is a wooden ramp protected by another bandit leading up to the southeast . Near the top is a passage heading left ( northeast ) to an alchemy lab with a random mage . The path to the lab can be easy to miss , and has a tripwire trap . The room with the lab also has a chest against the west wall containing random loot . Back on the main path , it eventually leads to a large cave with a waterfall and a bandit mining the moonstone ore veins . An apprentice - locked chest can be found beside the bandit . Throughout the cave , there is a wavering distortion in the air , similar to heat distortion around a fire . This indicates the presence of flammable gas , which can be ignited with a flame spell , shout or torch . This will have about the same damage as oil on the ground ; however , it will be in the air and thus less avoidable . Note that simply holding a fire spell ( not charging or firing / fired ) will ignite the gas , so caution is needed . Entrance to Kagrenzel . The map shows that the path continues further beyond the waterfall . By climbing the rocks opposite the opening ( in the east corner of the room ) and then using the Whirlwind Sprint shout , it is possible to reach the top of the waterfall . At the end of the corridor there is a passage to Kagrenzel . In the entrance tunnel for Kagrenzel , there is a Falmer Chest on the left side . Climb the wall on the right side and find a Centurion Dynamo Core at the top of the small waterfall . Turn around and find a flawless diamond on top of the stone arc , which can be obtained either by shooting it down with an arrow , using the Telekinesis spell , or by jumping and quickly grabbing it while still in the air . Another way to get the diamond is to use the Unrelenting Force shout to blast it down off the ledge . The tunnel eventually leads to a large cave with a bridge over water leading to another tunnel to the left ( southeast ) . There is an adept - locked chest to the left behind the altar . From the bridge Falmer will begin to appear from their wall mounted tubes behind the Dragonborn . Sneaking backwards to remain undetected can be effective here . Further down the tunnel , the Dragonborn will be ambushed by several leveled Falmer - due to the cramped tunnel , this can be quite tricky if taken by surprise . Near the location of the ambush is a Moonstone ore vein . At the end of the tunnel is a Falmer chest , and a large body of water . In the depths of this pool , to the left ( west ) of the stone pillar supporting the bridge is an expert - locked Dwemer chest . Finding it may require waterbreathing spells or potions or the Volsung Mask , as water visibility is low . The chest contains leveled loot . Both the tunnel and pool area are prone to rockfalls , although the tunnel rockfall may be fairly harmless due to a bug where the rocks hover just above the tunnel floor . The pool rockfall may cover the Dwemer chest . At this point , it is impossible to go any further , and backtracking is required in order to exit . One cannot gain access to Kagrenzel ' s main hall by entering through the cave ; Kagrenzel ' s main entrance up the mountain will need to be found .