I will skip conversation pointers, as those choices are entirely up to you.
Move away from the ladder, down the stairs.
Walk to the right. As soon as the camera changes for a nice view of a tunnel heading down, you should take it. You can only move down the sides of the tunnel.
Once you've dropped into the lower tunnel, walk to the left, take a right turn and a left turn.
Walk towards the group of walkers. After the cutscene, enter the passageway to your left.
You see a pipe. Turn the wheel to the right.
Take the wheel off the pipe.
Move towards the walker behind the grate (with the water). As soon as the camer shifts to another angle, move towards the camera.
Open the passageway using the climbing pick.
Move away from the camera, towards the pipe without a wheel on it.
Put your wheel on the pipe, and turn it to the right. Water starts flowing next to you, and the walkers will move towards you.
Quickly move to the left, and enter the passageway you've just opened.
Move through the passageway, until you've passed the pipe from which you took the wheel. Notice how your screen went red, but is now fading again.
Wait untill you're absolutely positive the last walker has moved past the opening of the passageway. Get out of the passageway, and move towards the lone walker remaining at the end of the tunnel.
After looking at the person who has been eaten by the walkers, keep moving towards the lone walker. You'll get grabbed by a walker from the grate on the ground, and the other walker will notice this.
Take care of the walker grabbing you, and then the walker moving towards you. Note that if you use the climbing pick, the other walkers will stay with the water, but if you use your gun, they'll hear the sound and start moving towards you.
The grate is stuck. Go up the stairs. Try to use the climbing pick on the ladder, like Molly did.
Move the sign.
Walk through the passage.
Open the door.
Next big choice of the episode; how do you respond to Vernon?
After the conversation, take away Vernon's gun.
After some more conversation, you'll receive the trophy.