Go to the base of the wall with grandpa. Shoot the wall to open up the maze. Wall jump up in it around to the top. Now to right. Open up that maze. Wall jump up in it and across to the right on the ramp. You'll have another jumping area, and then one of those pull-all-the-tentacles-off, wash-the-face, pull-out-the-cork monsters. Wheeeeee :) When you slay him, you get to go down the chimney into the Tomb of Treasures!

Tip from A Spiro:
There is a blue coin and a 1-up underwater to the right of the waterfall in the bay. You will see a string of gold coins going underwater. Follow the gold coins down and eventually you will get to a blue coin. Keep going down and there is a 1-up. Be careful, a fish tries to eat you and the gold coins will not fully compensate you for underwater time.

Super Mario Sunshine Walkthrough