You have to destroy Babloyi and the machine that makes people blonde thus stupid. Look at the warp hole you came through. Use the bucket from the inventory and use it on the warp-hole to fill it with PLASMA. Pick up the piece of WOOD lying next to the warp hole. Then use the wood on the bucket with plasma to create a plasmafied wood carving.
Walk to the left as yoda told you and visit the vilage. Talk to the man sitting on the ground but he feels weak. The door on the right can’t be opened although there’s a big hole in the door. Use the plasmafied wood carving as a handle on the door and activate a microphone. Now you got someone’s attention.
Talk to the man who came outside and receive a SPOON and a BOX OF VITAMINS. You must sell it now you’re a salesman. The man sitting on the ground felt weak. He could do with some vitamins. Give him the box and you’ll get a 50 LOFFO in return. Talk to the man and learn about Babloyi and his tabacco and the secret.
Walk to the south and use the door of the house. Bibloyi comes out, sees you’re a salesman (the spoon does it) and you give him the tabacco and the pipe (well… actually the plasmafied handle). Bibloyi is destroyed.
You can’t enter the house because of the light. That will destroy the blonde making machine. Instead use the strange device from your inventory on the chimney to throw it in. You’re automatically being pulled back to the warp hole.
Game source: A copy of the game was found here on the internet.