Well, there was a note of Nikodemus in the first level, giving you a clue how to make gunpowder. And the rest => just using imagination. Besides that => the DK said soemthing about blowing up and the conversation between imp and smith gave clues, too.
http://www.kiya1.de/beyond/act1screens/Nikoms0.pnghttp://www.kiya1.de/beyond/act1screens/lavaforge0.jpgSee? this is the manuscript. You don't need it to activate the forge though. the lever is not active, so has no function. Only the lava forge is => drop explosive into it.
Kiya