Take a general look around the island first. Talk to the islanders in the "besieged village" before heading into the dungeon. There are two entrances to the dungeon. The first is at the top of the hill at the northern end of the Island just past the ruins (look for the dead tree - the entrance is just behind it). There is a second entrance, although it is a bit tricky to get to. There is a large sea door at the bottom of the cliff below the main entrance. While the sea door itself can't be opened, there is an alternative entrance just above it. You'll need to levitate up to it if you are in the water, or drop down to it if you are up at the main entrance (the alternative entrance is locked and trapped of course).