The only way to enter the Lair of Drakos is through a secret passage in the southwest corner of the map. The doors are all guarded by runes that you won't be able to get past.
When you first enter through the secret passage immediately check the same wall just to the east of where you entered. You'll find another secret passage leading to a small room containing some Spectres who apparentely are guarding a couple augmented items.
Now advance north, stopping at the edge of the Cloud of Blades. You're going to have to cross through here, so you might want to shield your party if you can. You can't step on the green runes, so make your way around them, and as soon as possible move to the eastern wall. There's a pillar that appears to be blocking your way, but you can actually walk right through it.
In the northwest corner of the room is a cracked section of wall that you can use Move Mountains to get through. I can't remember exactly what was in the coffin, but it wasn't really anything too interesting, as I recall.
As you make your way towards the northeast corner you'll trigger an ambush by a few Efreet. Once you've killed them continue along, but be aware that you're soon going to come within the range of a couple Ice Drakes sitting on platforms just around the corner.
Once you've killed the Ice Drakes you're going to have to pass between their platforms. Unfortunately for you, this area is filled with another Cloud of Blades. Once you're through use Dispel Barrier or a few Piercing Crystals to get through the barriers. You want to pull the lever that's south of the Drake Platforms. This will cause stairs to appear on the south side of their platforms, as well as causing some pillars to the west to shift.
Go back to the platforms and get the items off the eastern one, including a Priest's Bracelet. There's also some items near the lever, including a Barter Charm.
Look at the map to see where the two traps are that will trigger more ambushes. Depending on your experience and confidence you want to either avoid them or seek them out. The trap just to the south of the western Drake platform causes the appearance of a group of Flame Hydras, and the other one triggers an ambush by some Gorgons at the western end of the room.
Once you've finished this area go to the western end of the room, near the northern wall. Use Move Mountains here to get through another cracked section of wall, and then immediately use Move Mountains again to get through the Stalactites and/or Mossy Boulders blocking your path.
On the northern wall of this room, near the middle, is another secret passage. Going out here takes you onto the ledge that runs around a pit leading to the Inner Lair of Drakos, but you can't just plunge yourself down it, nor do I think you'd really want to. Instead, check the southeastern corner of the ledge for another passage. Ignore the teleporter, since it will just dump you outside. Go around the corner and find the ladder leading down to the Inner Lair of Drakos instead.
Once you've reached the Inner Lair the first passage to the west leads to a fire pit containing an Efreet Pasha. The Pasha will drop a Warmth Charm when slain, as well as a ruby. Just to the north of the Pasha is a secret passage leading to a small room containing a Reanimated Lizard. The Lizards drops some Red Scale Armor, and there's also a spellbook on the floor, which teaches Arcane Shield Lv.3.
Go back to the main passage and follow it around until it leads to the west. Enter this room in combat mode, and immediately try to kill any Basilisks that are in your range. This room has a lot of Basilisks, so you want to be careful navigating the room or someone's bound to end up petrified. Once you've cleared the room of Basilisks go over the room again, this time picking up the potion-making herbs that are scattered around.
The next room to the east is empty until you get about halfway through, then you'll suddenly find yourself attacked by a lot of Skeletal Warriors who are apparently just climbing out of the walls, since there's so many of them.
Once you've cleared that room head up the passage leading north. You won't get very far before you're teleported into the middle of a pit of lava. In the northeast corner of the room is Drakos, the queen of Drakes, and in the southwest corner is her consort. Once you've killed both of them, check the room carefully. There's a lot of jewels lying around, and near the northeast corner is a Return Life Spellshard.
Now head west out of that room and you'll find yourself in Drakos' Treasure Room. There's some nice items just lying around, and, more importantly, on a body in the northeast corner you'll find the Pachtar's Plate Mail. This is the best suit of armor in the game, I think, and well worth the trouble it took to get.
Now would be a good time to use that teleporter, since you've done everything you can in the Lair of the Drakos, and there's no point in torturing yourself by going back through the Cloud of Blades again.