HM07 Waterfall is found in the Ice Path, not the Whirl Islands.
you go to whirl island and go in a cave then down a waterfall and into a room.
all of the island
Whirl islands
there in the cave where the waterfall is.(explained it the best i could)
I believe the Top Right island.
It's in the third island.
By fishing or surfing in the whirl island caves
go to the island closest to olivine city and your Pokemon need to know waterfall wirlpool and strength and maybe rock smash also come with a lot of ultra balls
go to whirl island and talk to the man on the third floor down then you can go past him
whirl islands is in jonto and you can get there by surfing south from olivine city. you can get a lugia in there if you have a silver wing. i hope you find your way through! -RR14 :)
get the silver wing from an old man in pewter city,go to whirl island,top right
To find Lugia enter the Whirl Island Caves at the top-right island, then it should be pretty easy from there (if you're stuck use youtube or similar.)