Weevil

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After you've visited Princess Zelda at Hyrule Castle (and got the letter), head through Kakariko Village until you come to the gate leading up to Death Mountain. After you show the letter to the guard and he opens the gate, he tells you about the Mask Shop at Hyrule Castle (the shop near the Temple of Time).

To get the Mask of Truth, you have to act as a salesman and sell 4 masks. The Keaton Mask you sell to the guard at Kakariko Village; the Skull Mask you sell to the Skull Kid in the Lost Woods (enter and go left); the Spooky Mask you sell to the little kid wandering around The Graveyard at Kakariko Village during the day; the Bunny Hood you sell to the man running around Hyrule Field (he appears once you get the Ocarina of Time; he also sits down during the night).
After you sell off all 4 masks, the Mask Shop owner will allow you to borrow the Mask of Truth.