1> Study Material :
Sanskrit study material is pretty difficult to get . However in the market we find Upkar Publications Sanskrit by Dr Mitilesh Pandey . One can also approach Dr Rajendra Kumar for his compilation of notes which he has maintained form all his previous students .

2> Way to go about

The syllabus can be spilt into 1> Grammar 2> Non Grammar part .
A better explanation can be got by analysing the syllabus as follows
Paper-I

There will be three questions which must be answered in Sanskrit. The remaining questions must be answered either in Sanskrit or in the medium of examination opted by the candidate.

Section-A

1. Significant features of the grammar, with particular stress on Sanjna, Sandhi, Karaka, Samasa, Kartari and Karmani vacyas (voice usages) (to be answered in Sanskrit).
   This is the Grammar part which is also very scoring .
2. 1. Main characteristics of Vedic Sanskrit language.
   2. Prominent features of classical Sanskrit language.
   3. Contribution of Sanskrit to linguistic studies .             [ To be answered in Medium of Exam]
      Generally one question comes from this part . All the answers are well defined . So possibility of high marks
3. General Knowledge of
   1. Literary history of Sanskit,———- [ To be prepared in Medium of Exam]
   2. Principal trends of literary criticism      —– One question from here . Since answer is well known and scientific .High marks 
      
   3. Ramayana,
   4. Mahabharata  —————— A cursory look on these two would be fine
      
   5. The origin and development of literary geners of:
      • Mahakavya
      • Rupaka (drama)
      • Katha
      • Akhyayika
      • Campu
      • Khandakavya
      • Muktaka Kavya. ——————- on these Its advised to skip . Because more effort is needed and you have option to skip  . One is generally advised to avoid this   Question
        

Section-B

1. Essentials of Indian Culture with stress on
   1. Purusarthas-
   2. Samskaras-
   3. Varnasramavyavastha
   4. Arts and fine arts
   5. Technical sciences              ———————— To be answered in Medium of Exam
      
2. Trends of Indian Philosophy
   1. Mimansa
   2. Vedanta
   3. Nyaya
   4. Vaisesika
   5. Sankhya
   6. Yoga
   7. Bauddha
   8. Jaina
   9. Carvaka ————————————– Skip this question
3. Short Essay in Sanskrit ———————— One place where marks varies [ Not a very high scoring area]
4. Unseen passage with the questions, to be answered in Sanskrit.   —————– High Scoring area. Simple questions will be given . If u can understand Sanskrit then you can definitely score here

Paper-II

Question from Group 4 is to be answered in Sanskrit only. Question from Groups 1, 2 and 3 are to be answered either in Sanskrit or in the medium opted by the candidate.

Section-A

General study of the following groups:-

1. Group 1
   • Raghuvamsam-Kalidasa
   • Kumarasambhavam-Kalidasa
   • Kiratarjuniyam-Bharavi
   • Sisupalavadham-Magha
   • Naisadhiyacaritam-Sriharsa
   • Kadambari-Banabhatta
   • Dasakumaracaritam -Dandin
   • Sivarajyodayam-S.B. Varnekar—————————–  Before hand preperation .[ So medium scoring ]
2. Group 2
   • Isavasyopanisad
   • Bhagavadgita
   • Sundarakanda of Valmiki’s Ramayana
   • Arthasastra of Kautilya
3. Group 3
   • Svapnavasavadattam- Bhasa
   • Abhijnanasakuntalam- Kalidasa
   • Mrcchakatikam-Sudraka
   • Mudraraksasam-Visakhadatta
   • Uttararamacaritam- Bhavabhuti
   • Ratnavali-Sriharshavardhana
   • Venisamharam- Bhattanarayana———————— Advised to Skip
     
4. Group 4
   Short notes in Sanskrit on the following
   • Meghadutam-Kalidasa
   • Nitisatakam-Bhartrhari
   • Panchtantra-
   • Rajatarangini-Kalhana
   • Harsacaritam-Banabhatta
   • Amarukasatakam-Amaruka
   • Gitagovindam-Jayadeva—————————— To be answered in Sanskrit . Pre preperation is necessary

Section-B

Questions from Groups 1 & 2 are to be answered in Sanskrit only. (Questions from Groups 3 & 4 are to be answered in Sanskrit or in the medium opted by the candidate).

This Section will require first hand reading of the following selected texts :-

1. Group 1
   • Raghuvansam-Canto I, Verses 1 to 10
   • Kumarasambhavam-Canto I, Verses 1 to 10
   • Kiratarjuniyam-Canto I, Verses 1 to 10—————- To be answered in Sanskrit . [ High score area]
     
2. Group 2
   • Isavasyopanisad-verses-1, 2, 4, 6, 7, 15 and 18
   • Bhagavatgita II chapter verses 13 to 25
   • Sundarakandam of Valmiki Canto 15, Verses 15 to 30 (Geeta Press Edition)———— To be answered in Skt [ High Score area]
     
3. Group 3
   • Meghadutam-verses 1 to 10
   • Nitisatakam-Verses 1 to 10 (Edited by D.D. Kosambi Bharatiya Vidya Bhavan Publication)
   • Kadambari-Sukanasopadesa (only)————————————————- To be answered in English
     
4. Group 4
   • Svapnavasavadattam Act VI
   • Abhijnansakuntalam Act IV verses 15 to 30 (M.R. Kale Edition)
   • Uttararamacaritam Act 1 verses 31 to 47 (M.R. Kale Edition)——————————- Skip
     

The above stratergy will enable one to answer all the questions as of UPSC .

For further guidance please contact Dr .Rajendra Kumar @9818559711.

PS: I was reffered to Dr Rajendra Kumar by Sharat who is a IAS 2006 and cleared with Sanskrit optional . Actually there are many others whom Sir has guided with Sanskrit .