Hi

I am in the under water town, and just killed 2 crabs, pulled the lever, and got to
a closed door, wasent I supposed to meet a mermaid??? can anyone please help!

Go into underwater city
(mermaid telepathicly sounds a help message)
turn left go down some stairs
This small room has a air pocket above you
Exit the room by going out the other exit you did not come in
Mermaid is in front of you along with a grate that she will open for you if you keep talking to her.
Mermaid will give you the first of three glowing stones that are used as keys