After you catch/make faint red gyarados in the middle of the lake of rage, go to goldenrod. you must clean the radio tower from team rocket and then go to uderground basement. there you will do the same thing. after that, go to mahogany town and go east. there won't be that guy which blocked the way in the past.
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There is no kind of TM in Pokemon Crystal version that can teach your Pokemon ice beam. The only way to get it is to learn it naturally.
You go down the Ice Path to the farthest point and it will battle.
Your Pokemon are supposed to learn strength and move the boulders to the wholes.
it is in ice path, slightly after the bit which will give you the most trouble :-) it is waterfall and is crucial to get into kanto for Pokemon league email me WAT0018@kwrsc.vic.edu.au cya
Waterfall is found in the Ice path. You must do some tricky ice sliding puzzle to get to it. It is right in front of you when you get of the giant maze sliding puzzle.