Yeeeeep. I think you are describing the place I went first as well. 3 hours later I had a broken sword, no blacksmith to repair it and could not beat the boss there. Thus I thought the game was essentially over for that character. Until I sought help here. Turns out the most obvious path is the wrong path... you need to go to the small little trail tucked away at the edge of a cliff. Woops.
To be fair, this is one of the criticisms I had for Dark Souls as well. You can say your game is open like that and you have the freedom to go where ever. Sure. But not really when you first start the game because you will just get your ass kicked until you find the right path for beginners. Hence (I say it all the time) Demon Souls > Dark Souls.
Oh, but I love the game regardless ;)