Go out into the street. Collect the Golden Octopi. Use the telescope .
New Objective: Warn the ship about the kraken
Examine the cliff . Lend the fisherman a hand and collect the third toy soldier. Approach the fountain .
Collect the Golden Octopi. Examine the cart  and collect the thick cloth. Return to the street and use the cloth on the heap to the right, then, enter the Pawn Shop.
Collect another Golden Octopi. Examine the table  and collect 1 of 3 printing matrix pieces from behind the picture Approach the bookshelf  and collect tongs. Approach the desk  and open the drawer with the signet ring. Then collect the steel wheel.
Return to Fountain and talk to the fisherman .
New Objective: Open an alternate route to the lighthouse
Put the wheel in the switch , to activate a Hidden Object Puzzle.
Find all of the marked objects (Chapter 3: Hidden 1). You will receive the third toy soldier. Return to the Fountain. Examine the cart. Use the dagger to move the fishes open the chest and collect the Golden Fish.
Approach the fountain and move the trash away . Move the trash away with tongs collect the fountain key, which you need to use on the fountain.
Approach the fountain (Chapter 3: Fishes)
Return to the Pawn shop. Approach the shelf for toys and put the 3 toy soldiers on it Organize the toys in the way presented in Chapter 3: Toys. Approach the opened door and find the blowtorch. (Chapter 3: Pawn shop).
Return to fountain. Approach the fountain and use the blowtorch to open the manhole. Then, go down to the underground.
Objective completed: Open an alternate route to the lighthouse
Walk over to the kitchen to the right  and examine the pot . Collect the cash register buttons from there. Then, approach the shelf  and collect blunderbuss lock.
New Objective: Return the missing book
Approach the table . Collect the lighthouse map from there.
Then, put the blunderbuss lock on the table and assemble a weapon . Click on the items in the following order , , , , ,  and then . Take the gun with you . Approach the door and use the gun to shoot the padlock.