Light the fire and head left where you will find a large desert skeleton soul next to another tower. Walk down and come across two dogs at the gate. Go the other way.
There are two more dogs behind the cart and an Alluring Skull next to the corpse. Not far from here, more to the left, in front of the abyss, is the Homeward bone. When you walk among the undead, you will hear the voice of one of them. In fact, this character is not dead: this is Yoel from Londor (see screenshot). If you hire him, he will travel to the Purification Chapel.
Go to the gate and use the lever on the left to open it.
In the hut, on the right, there is a fire. Go to the larger house located on the left side. Watch out for two creatures that will stand in your way. Inside, move the hanging corpse (it will attack you) to get a small leather shield. Exit to the yard and walk around the house. Throw away other hanging corpses to get powder (look out for opponents who can attack with a pitchfork). Walk down and watch out for two hidden enemies. The best option is to go back to the stairs and avoid the arrow at the very bottom. Collect coal and exit the building.
The fallen body, which is in front of the building, harbors Loretta's bone. The whole area is teeming with enemies, so don't rush blindly between them. Start by eliminating the group that is closest to the building and sneak up on the first enemy from behind. Distract the other two monsters from the fire so that they don't get close to the rest of your enemies. Only after you deal with them, take care of the two remaining creatures on the left side. Just remember to sneak up on one of them and deliver the killing blow. There is a Soul of an Unknown Traveler under the gate.
Remember: If you have black incendiary bombs, you can quickly get rid of at least two groups that are located next to explosive barrels. Just drop the bomb close enough to cause an explosion.
Now you must attack the last group of enemies. Now the fat lady will join the battle (she has been inactive until now). Deal with all the weaker creatures to fight her one on one. Watch out for a series of powerful melee attacks and the moment she starts reading the tome, prepare a killing blow (don't let her catch you). After the fight, you will be rewarded with a Shard of Estus and Ember. Pay attention to the last remaining enemies.
Remember: Here you can move in two directions: in the building in front of you, which is behind the square, or turn right and walk across the stone bridge. Both paths will lead you to the same place where the arena owner is. If you want to take a close look at a place, you can use the first path and then explore the second.