The jumping puzzle is inside Mellagan's Grotto in the south of Timberline Falls. Proceed to the Okarinoo Waypoint (if uncontested) or the Coil Waypoint (if contested). If arriving from Coil Waypoint, swim underwater along shore to the Southwest, past the heart, to the area South of the small island. There you will find an underwater cave that leads to the South toward Okarinoo Waypoint. Defeat the Kritt, and then stay to the right fork in the caves. Surface just past the waypoint; Veteran Commander Plipdoolb and the POI will be on the rock.
The entrance to the puzzle starts just south of Veteran Commander Plipdoolb, starting with a path along the south cave wall, near the falls. Once inside the smaller cave, follow the yellow glowing balls to the deeper water on the left. To get to the true start of the puzzle, you must dive down and then almost immediately resurface to ascend a ramp. The jumping puzzle itself is a series of jumps on small, floating, glowing balls. If you die from a fall, the NPCs will resurrect you.