After speaking with the prisoner, who tells you he wants a cake, go to the church and talk to the girl Mia. She will tell you the recipe, so now head back to your room at the bar and check your recipe book. The new recipe should be there (it's the brown edged, white thing with red dots on it).
As for the ingredients, if you don't have enough, search the woods directly north of the main town and the NE forest for everything you need.
Once you've made the cake, return to the prisoner for some dialogue. After that, row SE past the island and you'll see a vortex. Take it and now get on land.
On land, walk around in the sand to get a worm enemy. Don't attack, just skip your turn (3rd or 4th option in the battle menu). It will transport you to the final castle/ laboratory.
I hope this helps and sorry no one responded sooner.