I usually skip the Gurgu volcano and get upgrades, then go to the Waterfall. Then I do the top floors of the Water Temple followed by Mirage Tower. (Thor's Hammer casting Lit2 makes it totally worth getting at this point in the game.). Then I do the lower floors of the Water Temple and make my way around through the Sky Castle. Finally, I go back and do the volcano before going to the Temple of Fiends.