Watch the cut-scene and walk up the stairs to reach Abbot Song. Equip your best Weapon style and whip them before they have the chance to know what hit them. Check the urn once you have reached the next area, and get prepared to deal with some demons in the upcoming hall.
Speak with the Water Dragon to learn that you must seek a Spirit Monk that will teach you more. The Lost Spirits are hard without a partner to help you out, as they will certainly drain your health and Chi powers.
Follow the pillar of light to reach the entrance, although you will be distracted by Lost Spirits and other abnormalities along the way.
You are dead at the hands of your once-trusting Master, and you must pay the Water Dragon a visit to raise yourself from being encrypted.