To open the red door which has the puzzle on it you must first go right until you come to a large display. Memorise this display and then return to the red door and arrange the three concentric circles so they match the display.
Once inside pull the red handle and ride on the cycle to power the pump. Go outside again, over to the right, and then down the red rope to the left. Drop off when the rope is at its lowest. Talk to the man in the house on the left, then the man in the hutch on the right. Take the spanner from outside the hutch, then climb back up the rope.
Now enter the house again and use the spanner on the second handle, then use the handle to stop the water flowing. Head outside and jump on to the wheel. Climb along the red ropes to make your way to the middle and take the blue-green trousers. Climb back off the wheel by going near the edge and give the trousers to the man in the hutch.
Pick up the guitar and play the following tune (numbering the strings 1-6 from bottom-top):
4 4 3 4 1
2 2 3 3 4
5 5 6 6 4
3 3 4 4 1
4 4 3 4 1 1 1
2 2 3 3 4 1 4
If you play through the whole piece again and stand up and knock on the door of the house on the left you will be able to access the backyard.