After you pass through the cave west of Shecola, you get a clue from Po about how to proceed, then you enter the cave near Po's house.
Explore the Cave
Go north from the entrance and you reach a room with four Looper snakes. The southeast snake will open a passage to the east when killed. Kill the southeast snake to open the east passage, and go through.
Kill the jumping Skulls, but before you leave the room, stand south of the northeast tile and jump north. An invisible tile will appear beneath you. From there you can jump onto the northeast tile to make a Baseball Bat appear. Take it, then go east to the next room.
Carefully kill the Bonehead birds, keeping in mind that they can jump over the water. Then go east to the next room.
The white tiles in this room will disappear from under you when you jump on them, so you have to jump off of them as soon as possible. You can't use a weapon while standing on a white tile or you will drown. Kill or avoid the Skull, and carefully jump from tile to tile, then when you are on the right middle tile, jump east to reveal a switch in the middle of the white tiles. Jump on the switch to reveal a passage to the east, and go through.
Jump onto the eastern tile, then jump east, where an invisible tile will appear beneath you. Jump east to step on the switch, then take the Bolas that appeared. Then jump west until you can jump onto the northern tile, then jump on the switch that appeared, and go north to the next room.
Go down the stairs, then go east to the next room.
The nearby tiles will disappear from under you when you jump on them, so you have to jump off of them as soon as possible. When you go east, a Kappa will jump out of the water and jump toward you, so kill it or avoid it. To the east, there is a tile that disappears and reappears. Jump onto the tile north of that to reveal a switch. Go east and jump on the switch, then go north through the door.
Kill the fly, dodge the mud that Mad Muddy throws at you, and jump from tile to tile to make Mad Muddy appear. Kill Mad Muddy to open the north door. Go through.
Carefully jump north across the disappearing tiles, and if you don't need a double heart, just go north to the next room and skip to the next paragraph. If you do need it, then jump onto the west tile to reveal a double heart. Before you try to get it, wait for the northernmost tile to disappear, then jump east as soon as it appears, and take the Stop/Slow watch so that there is a tile beneath the double heart. Take the double heart before the Stop/Slow watch wears off, then go north to the next room.
Don't jump on the tile to the left of where you enter the room. It reveals a switch that opens the north door, but the north door just leads to a dead end where you have to kill Kappas to open the south door. If you got caught in the dead end, kill the Kappas and go south to the previous room.
If you don't want a Try-your-luck sign, skip to the next paragraph. If you want to get a Try-your-luck sign, which has a chance of increasing or decreasing your extra lives, you can optionally jump north along the tiles to reach the north wall (if you need to wait for the Skull to get out of the way, just jump straight up and you won't drown), then jump west to reveal an invisible tile, and jump west again to reveal the sign. Then jump east to reveal another invisible tile, and jump east from there to get the Try-your-luck sign.
If you don't want a Magic Potion or double heart, skip the next paragraph. If you do want a Magic Potion and double heart, you should jump onto the westernmost tile to reveal a switch to the south, then jump onto it to open the west passage, then go through.
Go to the north or south side of the room, and jump onto the island in the middle to get a Magic Potion and double heart. See how to use magical items if you aren't sure how to use the Magic Potion. It restores five hearts when used. Go east to the previous room.
Jump onto the easternmost tile to reveal a switch, then jump onto the switch to open the eastern passage. Go through.
Kappas will jump out of the water when you jump across the tiles in this room, so be careful. If you don't see any Kappas, jump to different tiles to make them appear. Kill all of the Kappas to open the east passage. Go through.
Use the Bolas or Baseball Bats to kill the floating eyeballs in this room, and avoid getting too close to them. When you hit them, they will start quickly flying back and forth through you. Get out of their line of sight to slow them down again. One of the floating eyeballs will open the eastern passage when it is killed. Go east to the next room.
Go up the stairs, then go north to the next room.
Jump onto the tile, but watch out for the Mad Muddy that comes up from the water and throws mud at you. Step on the switch that appeared after you jumped onto the tile, then go north through the door.
Don't try to stand on a tile to stay from the purple Minotaur: it can walk onto tiles. Be careful to run away from the Minotaur while you try to hit it. You will lose a lot of hearts if it hits you. Try using the Bolas to hit it from a distance, or the Shooting Star if you have enough hearts. The Baseball Bat doesn't work well against it because the monster will probably hit you before you can get away. Step on the tile in this room, then step on the switch, then go through the north door.
Ignore the tiles in this room and kill the floating eyeball using Bolas or the Baseball Bat. This will open the northern passage. Go through.
Carefully kill the Minotaur here, then go through the eastern passage.
Jump onto the leftmost tile, then jump onto the switch, then go east to the next room.
Kill the Minotaur, then go south to the next room.
Ignore the Looper snake. Go to the middle of the wall and push against it to go through the hidden passage. Keep trying different locations on the west wall if you don't find it right away.
Jump west onto the water spout. You will land on top of the mountain. Go talk to the mountain hermit to receive the Scroll of Obob. There will be a cutscene. After the cutscene, enter the Sub-C, and there will be another cutscene. Then you will automatically proceed to Chapter 4: Confession.