Location
Old Altus Tunnel is located on the Altus Plateau, almost directly north of the Grand Lift of Dectus on the map. Head into the tree-filled valley north of the Lift that eventually leads you to the Shaded Castle. Along the way you'll find a curve in the cliffs on your left. You'll run into a pack of enemies - the most notable of which is a Troll - and beyond them you'll find the entrance to Old Altus Tunnel. You'll need a Stonesword Key to get inside.
Old Altus Tunnel
Immediately inside the entrance to Old Altus Tunnel is a body carrying three Explosive Stone Clumps. The elevator is also here, and you might as well use it since the ledges leading down the elevator shaft bear little of interest. The Site of Grace is waiting at the bottom of the elevator.
Down the tunnel you'll come to a shack with a miner inside, as well as a well-hidden hound. Beside the shack is the Summoning Pool, and behind the shack is a Smithing Stone [5]. Next to the shack you'll find a wider, multi-level area.
Take a right from the shack and go up the ladder. Beyond you'll find another shack, and near it are two miners and a soldier. None of them will notice you, though if you cause trouble a pair of hounds will rush out of the shack and attack you. Take out the pooches before going after everyone else. Inside the shack you'll find a Boltdrake Talisman +1, and check the right side of the shack for Staunching Boluses. Behind some exploding barrels on the far right is a Smithing Stone [5].
Head back to the ladder. To the left of the top of the ladder are bundles of wood that you can destroy to get at a wooden platform below. Follow the walkway to find two miners busy at work. Kill them, then grab the Smithing Stone [5] attached to the far wall and the Golden Rune [6] off of the nearby corpse.
There's a third shack down on the lowest level. Jump onto its roof and you'll find a Smithing Stone [5]. Don't jump to the ground as there are multiple knights and soldiers on the lowest level that will make your life a nightmare if you provoke them. Either attack them directly at a range, or, if you have Fire Pots handy, lob them at the many explosive barrels to badly damage your foes before you move in for the kill. Your foes will try to climb a long ladder out of the pit to get at you, giving you easy targets.
Hop down into the pit once you feel safe. There's a Somber Smithing Stone [4] in the shack you were standing on, and the next shack over contains a Troll's Hammer. Watch out for the two hounds guarding the Hammer. Beside this second shack is a Smithing Stone [5], snugged up against the rock wall. To the left of this shack is a miner keeping a close eye on another Smithing Stone [5].
There are two tunnels leading out of the pit. Check the one behind the shack you jumped onto first. It leads to a room guarded by a dog and a miner, and contains two Smithing Stone [5]s and a Somber Smithing Stone [5]. One or two well-thrown Fire Pots can wipe them out, thanks to the explosive barrels in here. Backtrack and check the second tunnel from the main pit to find the boss fog.
Stonedigger Troll
The chances that you've run into multiple Trolls by now are very high, and this Stonedigger Troll is the same as the rest, albeit with a bigger weapon. Stick close to its legs to negate the reach of its weapon and slash or blast away at one of its calves. Continue to wallop it two-handed, or slide a weapon into its face once it falls over. Repeat. It's an easy enough battle, so long as you watch for the Troll's movements so you know when to roll. Any Spirit Ash will make the fight all the easier.
You'll receive 9,600 Runes and a Great Club for defeating the Stonedigger Troll. You'll also reveal the teleporter back to the entrance of Old Altus Tunnel.