You head to Yamato after a resident in the amusement park tells you that the Otafu Base is there.
Warlock Zone IV: Yamato
In the area where you start, you can optionally go into every house and talk to the residents there. One of them mentions the Konami Code (↑ ↑ ↓ ↓ ← → ← → B A) but the resident says it doesn't do anything.
In the area north of that, stay away from the Kotemaru Robot (the robot with the umbrella over its head). If it hits you, it will steal your Pizza or Hamburger if you have any. Kotemaru Robots can jump over fences. There are thieves in this area as well, but they don't actually steal anything.
The shop in this area sells sandals, pizzas, and 1ups. Be sure to buy sandals until you have at least three. The 1ups are expensive, but you can buy more than just the four lives that are displayed below your health bar if you can afford it. Even though the extra lives aren't displayed, they really are there.
To the right of the store, you can reach a hidden area, but before you do, you can optionally go to the right side of the area, where there are some residents and a hotel. When you're done there, go back to the left until you are in front of the house with two doors. If you hit the wall between the two doors in the house, you open a door to a hidden area. In the upper left of the hidden area, there is $100 that you can only reach if you have at least three sandals. Go to the right from there, and you can hit the pot in the lower part of the screen to get a scroll. Then in the bottom right part of the area, if you have at least three sandals, you can hit the pot to get a gold cat statue, which increases your maximum stamina by 2. It also refills your health. Then go to the upper right part of the area to exit.
You will end up to the left of a store. You will see deer jumping around this area, but be sure not to hit them. You will lose money if you do. However, you can't collect them like you could with Ohana and Granny. You will just get hurt if you get close, to stay away.
In the store, you can buy chain armor, bombs, and 1ups (the 1ups will go to Kid Ying/Goemon if you're playing as him, even though the picture is Dr. Yang/Ebisumaru).
To the right of the store, there is a logbook shop where you can get a password to continue the game.
Go south to the next area. If you go east, you find the entrance to the Otafu base, but there are still more things to explore, so instead go south from the base.
In this area, you find a Concentration Game, a hotel, and a fortune teller.
Go north via the exit to the right of the fortune teller. You will find a couple of residents, and an employment center (with the same minigames as before: mole, paint, goblin). Beware of thugs in this area, who jump up into the air and shoot coins at an angle downward.
Slightly to the left of the houses and employment center, you can go north to find a Jutsu school. This school teaches technique 1 and 2. For Kid Ying, technique 1 lets you fly temporarily, and technique 2 lets you perform a lightning attack. As before, these techniques can only be used in areas guarded by a giant tanuki statue, and the techniques will become unavailable when you move on to the next Warlock Zone.
If you go all the way to the left side of this area, you find a restaurant where you can buy meals to heal up. To the right of the restaurant, you can optionally go north to cross a bridge back to the areas where you first arrived in Yamato. You can go there if you want to buy sandals or pizza, since you can't buy them at the other store. Buy sandals if you have fewer than two. If you went there, it's not recommended to go through the hidden area again (the one whose door is hidden in the middle of the building that has two doors) because it's quicker to just go south down the bridge.
After you have gone back south down the bridge (or if you skipped it), go to the right from the restaurant and you will find some white buildings. Go to the leftmost building, stand slightly to the right of the middle of it, and hit the wall to open a second hidden area.
In this hidden area, go south to find a scroll in a pot, then go to the right. You will see a wooden chest. You can reach it by jumping from the right if you have at least two sandals. Then go to the right and up, hit the pot to get the scroll, then go to the bottom right part of the area, where you can get a gold cat statue if you have at least two sandals. Then go north to exit the hidden area.
You will be in front of the rightmost white building. Go all the way to the right side of this area, then go north to enter the Otafu Base.