Discerning the Transmundane

Background
"I met Septimus Signus, a brilliant but mad scholar living in the northern ice fields. He's directed me to a dwarven observatory that supposedly houses an Elder Scroll. He doesn't care about the Scroll itself, but wants me to use some kind of machine there to inscribe a dwarven lexicon with the Scroll's knowledge and bring it to him."

Walkthrough
It is best to complete this quest alongside Elder Knowledge, so that the Oghma Infinium and the Elder Scroll can be obtained simultaneously.

Alftand
The hermit Septimus Signus has devoted his life to the Elder Scrolls. Septimus is located in Septimus Signus's Outpost, an ice cave north of Winterhold. Travel to Septimus. He gives a Lexicon and sends the Dragonborn to Blackreach, an underground dwarven city, which you enter through Alftand. Once there, follow the quest-marker to the Tower of Mzark.

Lexicon puzzle
Inside the tower, a tunnel is encountered which needs to be traversed. It can be traversed by solving a puzzle involving four buttons. Activate the Lexicon Receptacle to light the two buttons on the right. To decipher the code, press the third button a few times, until the Lexicon opens and button 2 lights up. Press button 2 until you see the overhead lenses directing light onto the sphere, then the first button lights up. Press this button to reveal the scroll. Now pick up the transcribed Lexicon (the cube put in the mechanism) from the receptacle, then proceed to pick up the Elder Scroll. After retrieving the Scroll, make sure to grab the Lexicon again for later use.

Harvesting Blood
Upon returning to Septimus, he confesses that Dwemer blood is needed to open the Lexicon. Since the Dwemer are extinct, blood from the Mer races of Skyrim must be collected to recreate it. Specifically, the blood of these races is needed:
 * Altmer
 * Bosmer
 * Dunmer
 * Falmer
 * Orsimer

To harvest the blood, loot the corpse of a deceased person with the Essense Extractor in the inventory. Blood samples can be acquired from any dead body in Skyrim, not just those killed by the Dragonborn or their followers.

All sources but Dunmer blood from Alftand through the dead excavation party and the Falmer fought there. Another good place to get this is Liar's Retreat, which has all of the blood types, except the Altmer. Beast Form allows persons in cities to be killed without raising bounty.

Suggested Sources of Blood
The following are suggested sources of blood.

Locations containing most blood types

 * Alftand
 * Chillwind Depths


 * Helgen - Bandits of various mer races randomly spawn here.
 * Liar's Retreat
 * Mzinchaleft - contains all but Altmer.
 * Nightcaller Temple - Orc, Altmer, and Dunmer.

Altmer blood

 * Alftand
 * Brittleshin Pass - Altmer Necromage
 * Chillwind Depths
 * Cragwallow Slope
 * Halted Stream Camp
 * Northwest of Helgen
 * Liar's Retreat
 * Ondolemar - Understone Keep
 * Shrine of Talos between Pinewatch and Anise's Cabin.
 * Taarie or Endarie - Radiant Raiment
 * Thalmor Barracks
 * Uttering Hills Cave - Summerset Shadows

Bosmer blood

 * Bandits - Random encounters
 * Alftand
 * Anoriath and Elrindir - The Drunken Huntsman
 * Chillwind Depths
 * Faendal - Riverwood
 * Liar's Retreat
 * Silent Moons Camp

Dunmer blood

 * Aranea Ienith - Azura's Shrine
 * Brand-Shei - Riften
 * Brelyna Maryon - the College of Winterhold
 * Drelas - Drelas' Cottage
 * Erandur - Nightcaller Temple
 * Fellglow Keep
 * Ilinalta's Deep
 * Jenassa - The Drunken Huntsman
 * Rannveig's Fast - bottom of trap door
 * Reeking Cave

Falmer blood

 * Any Dwemer Ruin

Orismer blood

 * Bonechill Passage
 * Helgen - Bandits random encounters.
 * Orc Stronghold

Hermaeus Mora's Intervention
Upon trying to leave the iceberg, Hermaeus Mora, Daedric Prince of the unknown, confronts blocks the Dragonborn's passage. He tells them that as soon as the Dwarven Mechanism is opened, Septimus Signus' usefulness will be over, and that the Dragonborn should take his place, to which they can agree or disagree. The options offer no discernible consequences.

Quest Conclusion
After gathering the Mer blood, return to Septimus. He opens the Lexicon using the gathered blood, but as he enters and finds the pedestal on which the Oghma Infinium resides, Hermaeus Mora kills him by suddenly disintegrating him into a pile of ash. Step inside and take the book. As the Dragonborn leaves the chamber, the Wretched Abyss appears again as a manifestation of Hermaeus Mora. They can decide to work together with him as his Champion or to disagree with any of his plans. Again, this choice has no consequences. Once the book is opened, the Dragonborn has the option of reading it (or choose "Do not read"). Choosing the path of Magic increases all Magic-based skills by 10, likewise for the path of the Warrior and the path of the Thief.

Bugs

 * When Septimus finds the book, Hermaeus Mora might not kill him and the quest will get stuck. This will most likely happen if you stay really close to Septimus, try to talk to him and read the book before he finishes speaking. However, you can just kill Septimus yourself and the quest will then continue as it should.
 * After Septimus is killed, if you leave the iceberg without taking or reading the book and continue on other quests once you return, the Dwemer box may be locked again with no way to unlock it and retrieve the book inside, even if you still have the essence extractor, Lexicon etc.
 * After completing the quest, the lexicon and/or essence extractor are still considered quest items and are unable to be removed from your inventory.
 * To level infinitely the Dragonborn must have the Oghma Infinium book and a bookshelf. to begin go to a bookshelf, enter the menu to place a book on the shelf and instead of pressing store, "read" the Oghma Infinium and select your chosen path. Now without exiting the menu store it on the shelf. Select "take" and choose 'do not read' now select action again to take the book and the Oghma Infinium is replaced back into the inventory and is still usable , now repeat these steps as many times as deemed necessary.
 * After Giving Septimus the Essence, he, and any companions you have with you freeze up. Leaving and re entering does not help.  Had to reload save, and send follower home first. But still Septimus only made it slightly further into his scripted animations, and froze again.  (I know of noone else who ahs encountered this to confirm)