After you defeat Wall Face in the Pandora Ruins, Jema tells you to go to the Water Palace. It's north of Pandora.
Back to the Water Palace
Luka in the Water Palace tells you that the Water Seed has been stolen. She says that it has been taken to Gaia's Navel or deeper. Go to the Dwarf Village. (Note: you can go directly to the Dwarf Village without talking to Luka if you wish.)
Dwarf Village
In the Dwarf Village, you find Jema and the Elder standing above a hole in the ground in the area where you fought Tropicallo. Jema says that the thieves are down below. Walk on the ledge in the hole to go down.
Thieves' Ship
On the ship, go down the stairs in the middle of the ship. In the next room, go north. Open the chest to get the Whip's Orb. Then go through the door in the north wall.
The Scorpion Army has stolen the Water Seed. They leave the room with the seed to power up their robot, Kilroy. Follow them and go through the door.
Kilroy
Kilroy swings hammers that will Moogle you, which weakens you a lot and prevents you from attacking, so keep your distance. Kilroy has no elemental weaknesses, so just have Popoi use any magic attacks. After Kilroy's HP have been reduced by about half, he will move around more quickly using the wheel that appears at his feet.
After you defeat Kilroy, you get a Javelin Orb.
If you ever go back to the thieves' ship, use the Magic Rope to leave. (The Magic Rope can be used as many times as you want.)
Go to Watts and forge your weapons. You may wish to level up all of your weapons before you move on.
Your next destination is the Water Palace to return the Water Seed.