waste > desolate, uninhabited (see 108.50:3)
3 Lurking in rocks and caves far underground, 4 And with green moss covering her nakedness, 5 To hide her shame and loathly filthiness;
loathly > loathsome, repulsive, hateful filthiness > obscenity, moral defilement
6 Sith her Prince Arthur of proud ornaments
Sith > Since
7 And borrowed beauty spoiled. Her natheless
spoiled > stripped (with less sense of violence than modern usage implies) natheless > nevertheless
8 The enchanter finding fit for his intents,
intents > purposes
9 Did thus revest, and decked with due habiliments.