Go to the island surrounded by holes below the Eastern Palace (where you found the second Piece of Heart) and fall down any of them. You can now play a pot-smashing minigame.
You may have noticed the thief when collecting this Piece of Heart earlier. Once the clock hits he will allow a special game to be played. It will cost 50 Rupees to play, and you will get 15 seconds to use the Magic Hammer to smash as many pots as you can. Each time you hit a pot, you will gain Rupees, which will increase with each pot you hit, from a Green Rupee, to a Blue Rupee, to a Red Rupee, and finally 50 Rupees. Every time you miss a pot, or hit a skull, you will return back to the single Green Rupee with the next pot you hit.
he will allow a special game to be played. It will cost 50 Rupees to play, and you will get 15 seconds to use the Magic Hammer to smash as many pots as you can. Each time you hit a pot, you will gain Rupees, which will increase with each pot you hit, from a Green Rupee, to a Blue Rupee, to a Red Rupee, and finally 50 Rupees. Every time you miss a pot, or hit a skull, you will return back to the single Green Rupee with the next pot you hit.