All American whaling ships, the Pequod included, have a sort of kiln in the middle of the deck, which is made out of bricks called "try-works," in which there are two huge "try-pots" (remember the name of that inn in Nantucket, back in chapter 15?) with iron furnaces underneath them.
At nine o’clock on the evening Stubb killed the whale, the sailors fire up the try-works.
At first they use wood shavings as fuel; later they’ll use the blubber left over from the try-works processing.
By midnight, the try-works are going full steam, and the ship, carrying a strange sooty fire, seems like some demon come to sail around on the ocean.
Here’s what happens at the try-works: the harpooneers use poles to throw huge pieces of whale-blubber into the hot pots, where the oil in the blubber liquefies and is separated from the rest of the whale’s flesh so that it can be stored in a relatively pure form.
Ishmael thinks that the sight of the ship "freighted with savages, and laden with fire, and burning a corpse, and plunging into that blackness of darkness" is a symbol of Ahab’s "monomaniac" (i.e., totally obsessed) soul (96.7).
Ishmael, who is at the helm steering the ship during this process, drifts off into strange dreams.
He starts awake and can’t see the compass to steer by; he feels like the ship is rushing, not toward, but away from all points of safety. He grabs the tiller, but it’s strangely inverted. He’s confused and horrified.
Finally, Ishmael realizes that, in his sleep, he turned around and he’s grasping the wrong side of the helm with his back to the prow and compass.
Ishmael turns around just in time to keep the ship from capsizing.
Ishmael reminds himself (and us) that, in the morning natural sunshine, will fall on the deck of the ship and make everything seem less sinister.
Yet, he knows that, given the way the world works, it’s wise to embrace sorrow and woe.
Still, you can’t embrace woe too much or it will drive you crazy.