How to get to Murderlin's Temple -

If you're having trouble getting Murderlin to accept the quest 'Find Murderlin's Temple' you should go back to Flamerock Refuge and make sure you have completed all other quests there.

Once you have completed all the quests in Flamerock Refuge then you can return to Murderlin and he will accept the quest.

There are 6 rounds to Murderlin's arena. The first 4 rounds have 4 waves each to them. They have standard enemies that you commonly see throughout the DLC and won't be very difficult. The fifth round has a total of 5 waves and is a little bit more difficult because Murderlin sends out more enemies per wave and a few Badasses.

Murderlin's 6th round is THE MOST CHALLENGING ROUND. It is called the BADASS round and has good reason for the name. It contains 6 waves of standard enemies and Badass versions of themselves. (example: both Sorcerer and Badass Sorcerer might be in the same round.) This round has the most enemies by far and tons and tons of Badasses compared to the other rounds.
Survival Guide

When you enter Murderlin's arena you will have to run to a switch. Activate it and from there move up the staircase to your right and in a corner between some boxes and a large pipe that runs from the floor up. There you will be safe from all traps and you'll have a good eye over the rest of the arena.

The most annoying and dangerous enemies are the Enchanted Skeleton Archers and the human Archers. They will just stay back and take off your shields like it's no one's business. Make sure you set them as your priority then go ahead and finish the rest of the enemies.