This shortcut lets you skip the entire Clock puzzle, and also skip almost all of the puzzles on the Gibbet. In effect, you've hardly played the episode at all!
Here's how it goes: in the centre of the Castle, there's a room with many traps in the centre. One of these traps is a Porkalator; if you stand there, you might get porkalated (ie., turned into a pig). The trick to this short-cut is that you deliberately stand in the middle of these traps to get porkalated. Or, if you're quick, watch for the yellow, roundish projectile -- that's the porkalator projectile -- and deliberately get hit by it when you see it. When you become a pig, you can fit through many places you aren't supposed to fit through in human form! (Another way of getting porkalated is if you have a porkalator yourself. Go whack a Centaur until he freezes into defense mode, then throw the porkalator. The Centaur's shield will reflect the Porkalator back at you and porkalate you.) Run out to the front of the castle, and run under the hole on the east side of the moat. There's a portal here that leads to the Effluvium. In fact, if you're not using this short-cut, you can get here from the Effluvium much later in the game. The hole where you crawled through can be opened from the inside so that it's big enough for you to fit through in human form.
The portal takes you to a room with four mini-tanks of muck in the Effluvium. (Actually, you need to open the wall in a small space where you teleport in.) Jump to the tank on your right, and turn the winch on the side, which will drain out the muck. Jump inside the tank, and go through the opening. Open the wall with a handle on the opposite side. Jump over the hole in front of you, and enter the room where the Brown Serpent is. There's another wall with a handle where the Serpent is standing; open it to reveal a portal to the Forsaken Outpost. Now, you've come to where it would take a much longer time to reach without using this shortcut! In fact, you've almost solved the puzzle of the Axe Key, without actually solving the puzzles themselves! But you missed all the fun you would have had otherwise, though. :)
(This short-cut was told to me by Rob Viren and Greg Hewgill.)