Use the Mumbo Pad to oxygenate the water so you can't drown. Jump in and dive down to the deep water.
Use the split pad and
Jinjos
Orange Jinjo: after you get the Running Shoes from Captain Blubber, use shoes and run across the lake to the Jinjo in the cave. This should be the final Orange Jinjo, rewarding you with a Jiggy.
Deep down
You'll see notes insidethe sea anemone tentacles. Shoot their eye with a regular egg then grab their treasure.
In the tunnel down below there will be an octopus swinging its tentacles. You will not be able to pass through. There's another tunnel with blue light at the end. That leads to Smuggler's Cavern.
Smuggler's Cavern
There is an aggressive puffer fish here that can't be killed with eggs so watch out. There's also a transparent fish with a cheato page inside. You'll see a Kazooie only metal tunnel.
There's a jiggy here on a platform above the surface.
Go up the trail and through the door into Jolly's. Use a grenade on the gunpowder keg to blow open a hole to easily return later.