Know one knows for sure the original source of Alchemy, its beginnings are shrouded in mystery. We do know that it dates back to at least Ancient Egyptian times from their glyphs alone, but before that it is not known.. at least in the 'public' spectrum.
Alchemists did work with elements, as they believe strongly in the above/below so that if they understood nature it will help them understand themselves. Alchemy was a science of the mind and spirit more then anything though, just like Scientology.
Here is a video that gives a quick over view of the alchemical process..
http://video.google.ca/videoplay?doc...69191085492326
The steps start at roughly the 11:30 mark if you wanted to zoom ahead, its quite interesting. This is of course just a quick overview the study it self is much much more in depth.