From StrategyWiki, the free strategy guide and walkthrough wiki

This is a tricky round. At the beginning, stay on the platforms until you reach a door, then go through it. Slide yourself under the gap (this may take a few tries). Head to the far right for a red potion, then go through the door. Head to the right and whack the snowman while jumping over the platform. Smash through the blocks. The top-centre block contains a helmet, if you can phase yourself through the blocks in just the right way. If you can phase yourself through the small hole you'll get a helmet, otherwise break the blocks on the floor and fall down. Both routes lead to the boss. He jumps around a lot but dies in four hits. He drops a heart which increases your health bar by one.