Complete solution:

     The first objective is to get yourself a pirate's costume so that
you  can  blend  in  with the yokels and get on to Hook's ship. At the
start  of the game when you're in Pirate Square go left to pick up the
anchor  and  the washing pole. Go to the right to Deadman's Pier. Pick
up  the  rope and use it with the anchor. Go to the Crossed Swords pub
and  get the two mugs from the tables. Go into the Bait and Tackle bar
and  pick  up  the third mug then go out of the door at the top of the
stairs. You should now be on the balcony over looking the square. Wait
until  the  pirate  is walking across the square and use the anchor on
the  top clock. If you've got the timing right you should swing across
to Mrs Smeedle's front door and in doing so drag the pirate's hat. You
may need to do this several times until you suss out the right time to
swing.  When  you've  got the hat knock on Mrs Smeedle's door and when
she  replies  use  the  anchor  to swing back. Now go back down to the
square.  Go  left  and  use the pole on the pirate jacket. Examine the
jacket and you find a coin.

     Go  to  the  right and into Mugger's Alley to see Dr Chop. Have a
couple  of teeth pulled out and he gives you two coins in return. Take
the roller blind and go into the Jolliest Roger pub and give the three
mugs  and  three coins to the barman. He gives you three mugs of cocoa
which you should then give to the man in the blue hat who falls asleep
giving  you  the  chance  to  steal his trousers. Now you've got three
pieces  of  clothing. Head back to the washing line and use the roller
blind on it - this enables you to put the clothes on in private.

     Now  go  to the Good Form pier and on to Hook's ship. Walk to the
right  and  take  some  money  out of the three pots. Go back into the
town.  Buy  the magnet from the tailors shop and then go to the beach.
Use the magnet on the 'X' and in doing so you uncover a clock. Go back
to  Hook's ship and walk towards the pirates. After a little chat with
Hook  you have to walk the plank and you find yourself gurgling on the
seabed.  Use the pole on the pulley to get it working and then look at
the  shiny  clam to find a conch shell. Use the clam to get out of the
water.  Walk  to  the  right along the tree branch. To get through the
forest go: north - east - north - west - north - east and east again.

     You should now walk into a rope trap which reveals the lost boys'
hideout. Walk left into the workshop and take the elastic then go left
to  the  jogging area where you can use the weights to get into shape.
Go  left to the Avenger. Get the net and examine it to find a piece of
string.  Go  right  twice to get to the Four Seasons then get the dead
branch and the flower. Scare the chicken by blowing the conch shell at
it.  Pick  up  the  eggs. Give the eggs to the boy in the workshop and
take the suction arrow.

     Go  right  twice  to get to the pond. Talk to Tinkerbell and give
her the flower. In return she gives you a thimble. Get the branch from
the  tree  to  the  right and use it with the string to make a bow. Go
back  to  the workshop and use the bow on the pan pipes then pick them
up  and go to the slingshot. Use the elastic to fix the slingshot then
go up and right to the cliff top.

     Use  yourself  with  the end of the fence to practice flying. You
need  to  do  this  several  times  then  ask Thudbutt about his happy
thoughts  and  he  gives you some marbles. Go back and insult Rufio by
saying  'Oh  Rufio'  and  this enables you to use your imagination and
throw  some  imaginary  food  at  him.  You now find that the table is
covered with food.

     Go  down  to  the round pond and then walk towards the tree. This
takes  you  to  the  island. Examine the log bed the fireplace and the
chair  and  then talk to Tinkerbell. You are shown a movie-like story.
Rufio  should  give you a sword and then you fly off towards Hook. All
you need to do to finish him off is talk him to death.