Spoilers to follow:
It's a tricky sequence. Let's see if I can get it right for you.
Your goal is to empty the room of lava, which you have done, reach the fan control and turn it on, and then refill the room with lava to blow hot air through the pipe.
Move the red knob clockwise. It makes the control gear move clockwise also while raising the catwalk and lowering the gate that drains the lava to your right.
Next, slide the red knob to the left through the center groove, which will allow you to look at the painting on the control gate.
Next, rotate the red knob counterclockwise to raise the catwalk and the inflow gate. Lava will come in, but don't panic. You should now be able to reach the fan control switch. After turning it on, turn the red knob clockwise. The catwalk will go down one level and the inflow gate will close. Slide the red knob to the right through the center groove to switch the control gear to the other side. Move the control knob counterclockwise to open the drain gate and lower the catwalk.
Before you leave the lava room, make sure you slide the red knob to the left again because you can't do it in the upper control room. From the upper control, refill the room with lava.
One other thing, which I'm sure you discovered. The control knob can be a bit tempermental and doesn't always go where you want it to without some effort.
Never allow the fear of striking out keep you from playing the game! -Babe Ruth