After discovering that Hermes is not in his temple in Argolis, you must go to Zeus's temple to find him.
Return to Arcadia
Go to the left in the cave until you reach a dead end, then go through the door at the end to return to the first area of Argolis. Go to the upper-left of the area and go through the door to return to Arcadia.
Go to Zeus's Temple
From the small house, go to the right until you reach a dead end, and go through the door. Go past the old woman in the tree and go through the left door. From there, go to the right until you find the white house. Go in and follow the path. Defeat the bull, then go to the left and enter Zeus's temple. Go to the right and you find that Hermes is there instead of Zeus. Press down to kneel, then press the attack button to talk to Hermes. He gives you the Sandals of Hermes. Kneel to pick them up. With these, you can jump higher, and you can also flip upside-down to walk on ceilings.
Talk to Hermes again to get a password. Even if you don't write down the password, getting it will let you keep your olives if you choose Retry after a game over.
Now that you have the power of fire and the Sandals of Hermes, you can go to the forest in Peloponnesus.