First off I'd like to say that all of these combat challanges is far easier done in co-op, either locally or through xbox live. Twice the power, double the fun.
This is one of the tricker pit challenges, since you'll descending between platforms that can be destroyed and dodging large boulders.
Start by picking up all the skullbombs, and toss one towards the forking lava fall. Get as far away as possible and let it detonate. Now you can move on to a lower platform, directly below the hole you just created.
Move to the next platform and here you can find yet another skullbomb. I suggest you hold on them from now on, since you can easily dispose some of the enemies on the way down. Simply by throwing a skullbomb at the destructible platform they're standing on and letting them fall. Note that your enemies won't take fall damage, but you obviously do.
When you move towards the next platform, you can see the rather step descent you'll have to make to reach solid ground. My advice is to take it slow, take on the enemy one by one, use the skullbombs sparsely and you'll be just fine. Beware of the gigant holes in the wall, try to avoid them at all costs. They spew out large boulders and they'll drain a lot of your health, if you get hit. They might even instant kill you.
On this next platform you will encounter your first enemy: A golden guy with a mask. They aren't that difficult to take down, but they might throw skullbombs if you step too far away from them. That can lead to all kinds of hell, since your standing on destructible platforms. Try to keep it close quarters and move downwards.
When you finally arrive on to the first solid platform, you'll have to face off against every enemy you didn't kill off on your way down. When you manage to dispose off them, you're allowed to continue your downward journey. Ensure to eat the fruit if you need it, before moving on to next area.
Jump down middle to continue your descent. Here you'll encounter two heavy enemies. As fast as you possibly can obtain one of the two melee weapons. From here try to keep the enemies in a straight line, so they don't flank you. You might even manage to get them tackling each other. When you vanquished your enemeis move on to the next area. To make things easier from now on bring a melee weapon with you.
In the next area you'll face a bunch off golden chickens. Drop your melee weapon and kick the shit out of them, when you're done make sure to bring the melee weapon onto the next area.
Here you'll face your last enemy: A shadow version of yourself. He ain't that hard, he's just got a bit more health than any other of your foes. Just bash him around with the melee weapon and try to get in some kicks, while he's down and he'll be dead in no time.