Guybrush lands mostly unharmed on the shores of Dinky Island, the fabled location of Big Whoop. He meets Herman Toothrot, who had somehow managed to leave Monkey Island and ended up here, but Toothrot is of no help at all. On the shore with him, however, is a talking parrot who seems to be muttering something about treasure - but will not say anything coherent other than "Polly wants a cracker!".

Guybrush tries to explore the island on his own, but quickly realizes that the jungle is too difficult to navigate. He does, however, find a box full of dynamite, as well as a box of salt cracker mix. He mixes the box with some sea water to make crackers, which he feeds to the parrot. It turns out that the parrot belonged to Captain Marley's pirate crew, had heard them discussing the route to the treasure, and can recite the way there.

Guybrush follows the instructions and finally reaches a clearing where a huge "X" was marked on the ground. He digs a deep hole and places the entire box of dynamite inside, igniting it and blasting the jungle floor apart, revealing a deep chasm. Guybrush climbs down into the chasm and onto a precarious rock platform, where he finds a heavy chest - supposedly containing the lost treasure. However when he grabs the chest, the platform crumbles away, leaving Guybrush hanging in mid-air from his rope while holding the chest in his other hand.

This returns us to the very start of the game, with Elaine rappelling down to hear Guybrush's story. However as soon as he gets to this point in the story, his rope breaks and he plummets down into the darkness.

Guybrush [[BlackoutBasement fumbles around in the darkness]] and finally finds a light switch. Flicking it on, he discovers that he's in a series of artificial tunnels. The chest holding the "Big Whoop" treasure is empty, apart from an admission ticket to an amusement park. Before Guybrush can contemplate this, [=LeChuck=] appears from one of the tunnels and gloats at Guybrush's impotence against him. He then pulls out a kewpie doll of Guybrush and begins stabbing it with pins, causing Guybrush to shrivel in pain. When the doll malfunctions momentarily, Guybrush quickly runs down the tunnel to seek a way out.

The tunnels quickly turn out to have no exit. With no other option, Guybrush decides to give [=LeChuck=] a taste of his own medicine by constructing a kewpie doll of [=LeChuck=] himself, [[{{Bookends}} based on the same recipe]] that the Voodoo Lady gave him to construct Largo's doll. When [=LeChuck=] catches up to him in one of the tunnels' side-rooms, he hands [=LeChuck=] a napkin to blow his nose, collecting his fluids. He then activates the coin return of a vending machine so that the greedy [=LeChuck=] would bend down to grab it, at which point Guybrush yanks out his underpants. A bone from a pair of skeletons in one room, mysteriously labeled "mom" and "dad", serves as the bone component.

Finally, Guybrush finds an elevator leading up to the surface, but there is an immovable large box inside weighing just enough to put it over the operational weight limit. Guybrush solves this by inflating a couple of gloves from a helium balloon. As the elevator comes to life, [=LeChuck=] appears and gets his beard caught in the closing doors, providing the hair element.

On the surface, Guybrush discovers that he is in fact in the alleyway on Melee Island, but all exits from the alleyway are blocked. He takes the time to construct the kewpie doll, heads back down into the tunnels, and finds a syringe to use as the needle. He confronts [=LeChuck=] and stabs the doll multiple times, then begins to torture the doll in increasingly sadistic ways. Finally, wondering what might happen, he tears a leg off the doll - causing [=LeChuck=]'s leg to rip off his body.

Before he dies, [=LeChuck=] begs Guybrush to come closer. He asks Guybrush to take off his mask, which Guybrush does -- revealing that [=LeChuck=] [[LukeIAmYourFather is actually his brother Chuckie]].

The scene suddenly shifts to a scene of the main street Booty Island visited earlier, except now it is an amusement park called "Big Whoop". Guybrush and Chuckie -- now young children -- come out of the tunnels to meet their worried parents who had been looking for them. When their parents ask what the children were doing, Guybrush tries to explain that Chuckie tried to kill him, but his parents dismiss this as a kid's fantasy. As the family walks away, Chuckie [[AsideGlance turns to the camera and gives the audience a knowing grin]], and with lighting arching from his eyes, his face briefly turns into the menacing visage of [=LeChuck=].

Back on Dinky Island, a worried Elaine is still watching the hole Guybrush fell into. She wonders if [=LeChuck=] has cast a spell on Guybrush.
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!!Tropes:
* BreakingTheFourthWall: Guybrush can find a pay-phone, which he uses to call the old Lucasfilm Games hint line and annoy the operator with stupid questions.
* ChekhovsGun: Guybrush must beat [=LeChuck=] by gathering ingredients for his own voodoo doll based on the recipe he got from the Voodoo Lady way back in Act 1: Something of the Head (a piece of [=LeChuck=]'s beard), Something of the Thread (a scrap of [=LeChuck=]'s underwear), Something of the Body (a handkerchief covered in [=LeChuck=]'s snot), and Something of the Dead (a bone from one of Guybrush and [=LeChuck=]'s parents).
* TheEndOrIsIt: The game ends with Guybrush's adventures seemingly being AllJustADream. Then "Chuckie" turns towards the camera and takes on [=LeChuck=]'s evil grimace. Then it cuts back to Elaine on Dinky Island, worried that Guybrush might have fallen under some evil voodoo spell.
* HeliumSpeech: Guybrush can use the helium-filled balloons on himself to inhale the helium and make his voice sound funny.
* IceCreamKoan: Herman Toothrot offers this riddle to Guybrush: "If a tree falls in the forest, and no one is around, what color is the tree?"
* LukeIAmYourFather: [=LeChuck=] claims that he and Guybrush are brothers. Their exchange is even based on the TropeNamer scene from ''Film/TheEmpireStrikesBack''.
* OverlyLongGag: Guybrush can spend an inordinately long time trying to guess colors to answer Herman's koan.
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