You must have all nine Life Upgrades to gain the final sword, The Water Sword, to fight The Dahaka and receive the alternate ending. Before entering the Central Chamber the second time, make sure you go to the pedestal in the center of the hourglass room to receive the Water Sword. Enter the Central Chamber to trigger the intermission sequence. Then, chase the empress to trigger the alternate Boss fight with The Dahaka. This can be a very tricky Boss (especially under the hard difficulty setting), and he may seem very cheap at first. Right when the fight starts, trigger the Ravages Of Time attack against the beast. Do this twice, then run around and refill your Sand Tanks. The Dahaka will try to shoot his tendrils up through the ground in front of you. The best tactic to avoid them is to run around in a circle -- they will not touch you. Once your Sand Tanks are filled, go back towards him. When you get close to him, he will shoot tendrils out of his stomach at you. Roll under them then activate Slow Time and hit him until his health is about half way down. An intermission sequence will start, and the beast will be hanging on the side of the cliff. Run over to him and use Ravages Of Time as much as possible. When his health gets too low, he will jump up into the center of the stage and regain half of his health. This is when he becomes angry and things get tricky. He will try to jump on you several times. Run around the stage collecting the sands, rolling out of the way when he jumps towards you. If he misses you, he will try to shoot his tendrils at you; just run or roll away from him. He will eventually go back to shooting tendrils out of the ground. When your sands are full, run towards him and use the same tactic as before. When your down to a few of Sand Tanks, fill up again. The strategy is to get his health as low as possible before he gets knocked to the side of the cliff, then use either Slow Time or Ravages to kill him off before he jumps back up again.
-Get the Light Sword and ensure that you do not throw the Light Sword. Hang onto it until the Dahaka fight. Beat on him as instructed above, but when he hangs on the ledge for the first time, slow time and hit him with the Light Sword (not the Water Sword). He should die before he can jump back up. If not, you will defeat him the second time.
-Slow down time and attack until he falls off the edge. Once he does, slow time again and attack until his life is gone. If you need more sand, there is some scattered around the platform.
-The Dahaka's attacks are predictable and repetitive. When far away he will shoot his tendrils through the ground up at you. Run around in circles to avoid it, making your way closer to him. If you get too close he will shoot his tendrils directly at you. Roll to evade them. As you roll, slow down time and go in for heavy combo hitting. As you get him lower in health, the Empress will help you and shoot him off the arena. He will become stuck on the ledge. Stock up on the Sand Tanks that are regenerating around the arena. Slow down time or use Ravages Of Time to inflict maximum damage. He will eventually get back up and jump at you. Keep rolling until he calms down and remains stationary. Repeat the process until he is defeated.