The next day, you wake up in your house. Climb down the ladders, walk around if you want to and get out. Talk to the children Beth, Malo and Talo, along with Collin near your horse and go back to the village.
Speak to the man at the gate, who will show you a beehive and explain that he lost his cat. Get in the shop to the right (from the entrance of the village), talk to the manager and get out. Go towards the middle of the village and look for a man standing on some sort of pillar. Talk to him using the Z lock and climb the vines to reach him. Jump on the other pillar, collect the Hawk Grass and call a hawk by blowing into it. Face east and look for the beehive over the house of the man looking for his cat. Release the hawk which will make the beehive fall down! Then go over the house by climbing from the right, climb the vines and walk across the two branches to pick up 15 rupees. Climb down and talk to the man to hear about "larva".
Head south and speak to Bo, the Village Chief. When the goat arrives, try to stop it by "grabbing" it and you can then pet it (it's not a problem if you fail to catch it). Try to enter his house to learn that Ilia locked herself in. Talk as well to the pregnant woman who will inform you that she lost her cradle. Cross the big bridge and get into the watermill. Talk to the woman and take a look at the beautiful shield, then get out. Go right, you will notice the runaway cat, and jump into the water. Swim towards northwest, look at the monkey, then go back on the bank near the watermill wheel. Climb the vines near the man, then jump on the second pillar, then on the roof, finally towards the next two pillars. Collect a Hawk Grass, call a hawk, aim for the monkey and release it. The bird of prey will grab the basket in the hands of the monkey! and bring it back to you. Go give the cradle back to the mother. If you ever fall into the water, push it on the bank near the watermill road. Talk to the pregnant woman, follow her and she will reward you with Collin's Fishing Rod!
Go behind the watermill, the cat is there. Go a little bit further on the pier, look for the place with fishes and cast the line! Shake gently your Fishing Rod to bring back the line to you if needed, then wait a few seconds. The "stick" in the water will get vertical. As soon as it sinks (almost entirely), raise your Fishing Rod (wiimote/controller) and you should hook a fish. The moment a fish is hooked, raise your Fishing Rod by raising your arm for a few seconds until you get the fish out of the water. Once the fish is released, use your Fishing Rod to get another fish. This time, the cat will catch it and flee. [On Wii U, it takes the first fish.] Go back to the shop, where the cat came back. As a gesture of thanks, the manager will give you half a Bottle of Milk. If you already have 30 rupees, talk to Sera again and buy the Slingshot. If not, get out, look for rocks/pumpkins and throw them to find rupees, then come back to the shop. Once you have the Slingshot, head back to the forest.