To begin Puzzle #4: Demolition go to the place where the kraken was destroyed. Where the statues once were has now become covered in rocks. Drop a child on the spot to the far left of the map by the tree with the chief coat and have the child create a hole. Repeat this on the spot on the far right of the map by the stairs that lead to the garden. Then repeat again at the very top of the map where the jungle is now open. Once you have all 3 holes use the Crafting Hut to crate boom sticks and then have an adult take the them to each spot and blow up the rock. This will then reveal the moon and sun statues and the place for the statues.
Fine powder = charcoal + salt Peter
Boom powder = fine powder + sulfur
Boom stick = boom powder + bamboo
Check out our Puzzle #5: Unwanted Guest page to get the solution for the next puzzle.