First of all you need to go to Merson City hotel and talk to the bald guy inside. He lets you in if you have the psi badge. Then go to the hot spring inside, talk to another bald guy and he'll give you the Rock Smash HM. If you already got rock smash you need to go to the Rijon tunnel from Castro Valley (leave the town to the north and then go to water on left and surf). There you need to smash some rocks, which will open you a way to further parts of the tunnel. You pass the first ladder, then you smash another few rocks and pass another one. Keep going west until you see rocks and boulders (yes you need strenght to do this). You need to pass them and go to the entrance that is just in front of you. It leads you to ice path of the tunnel. Go north and you will see another entrance. And next you have to figure it out yourself :) there are few spots of cracked ice up there and they make you fall on the lower level. Once you fall, you find a pokeball with Waterfall :)
EDIT
Sorry, forgot about the other questions.
So, the 8th gym is in Eugalou City. It is located in the cave on right. To get in that cave you need a mist stone. To get it you need to do a lot of things honestly. If you got HM's 1-7 (and I suppose you do) you need to go to the Baton City, then go south and surf to that building (not sure if there wasn't any previous event you need to do) Then you're gonna talk to some guy and a leader you defeated. They say that a girl is missing (it's the leaders sister) in the haunted forest and you need to find her. So you go to the haunted forest, but there is team rocket in there - you have to defeat about 5 or 6 grunts with pokemons about 50 lvl. Then you go to the end of that forest, you see the girl and talk with her. Then Gengar at 50 lvl attacks. You have to kill/catch him and then you go back to that building and they give you some price I think. The leader asks you to come with him to johto (the cycling road is now opened again), but first you need to go behind that building and talk to the dead lady - she gives you the poke flute to wake up snorlax, whick is blocking the way (as always...) at the end of cycling road. Then you are in goldenrod city. Go to the pokemon centre and there will be that leader and a scientist (btw. that guy is red - your dad. I dunno, but I screwed somthing. Anyway, doesn't matter xD). Then one grunt comes in and steals a part of communication machine and you need to get it back - fight all the rockets. So u go back to Botan City and go west and then north to the Silph Warehouse - the Team Rocket base. Now you only have to fight all of them and take the part back to goldenrod city, but be careful - they have strong pokemons (55 lvl average). Now when you've done everything you go back to your home and dad gives you the mist stone and you can challenge the 8th gym :)
