I backtracked a little to the orange spring platform near Peach's Castle. The item block on the island has some Cozy Wear. Go north of where you battled Petey Piranha. You'll find some Paper Toads to the right, who are thankful to see the bros. They're startled when a Paper Magikoopa appears. He orders some Goombas to bring in a giant papercraft Goomba. He says the cardboard in this world is of very high quality. The Goombas drop the papercraft, blocking the path to the desert. They say it's too heavy. The Paper Magikoopa says the cardboard is of higher quality than the minions in this world. He approaches the bros and the Paper Toads flee to the north. He says they won't be going that way anytime soon, so they shouldn't bother trying. He leaves and Toadette appears, saying the papercraft is something she's been dreaming about. She knows she can build something to destroy the papercraft Goomba. She's going to need more Paper Toads and a bunch just fled.
Go north and the Paper Toads realize they reached a dead end. They're freaking out and want to go home. The bros have to herd the Paper Toads through a gap in the ground to a fenced in area, without letting them reach the exit. If one escapes, you fail. You can retry without penalty. Short dashes into them are effective to push them back, but some may escape when you turn corners. Running in circles in front of them and not through them will push them in the direction you want. When some are close to the gap, repeatedly press the displayed button to push them through. When all 20 are rounded up, Toadette appears and thanks the bros. She needs a few more, however. Lakitu appears, having overheard her. A couple more Lakitu appear to transport the Paper Toads. He says to visit the Lakitu Information Hut, the last hut on the right in this area, to get more info on the Paper Toad situation. Everyone else leaves.
In the fenced area where the Paper Toads were rounded up, there are a couple of item blocks, one with a nut. In the left hut, there's a Toad who thinks he's a know-it-all. He wants to match wits with the bros. They must answer 3 of 5 questions correctly. Win and you get three Heart Beans.
1. Who is this? Nabbit
2. How did Paper Mario first appear in this world? Fluttered down from the sky
3. Who did you battle first? Paper Goomba
4. Which one is Toad? (Pick the correct silhouette)
5. What happens when an enemy runs into you from behind? I fall down
The Toad says there are 4 other Toads like him with quizzes.
Go into the Lakitu Info Center. Lakitu says the Paper Toads made it safely to the castle. Starlow wants more info on Paper Toad locations and makes the mistake of mentioning compensation. Lakitu says it'll cost 5000 coins. Starlow says they can't afford that, so Lakitu offers them a special deal of 10 coins. Talk to the attendant and they'll warp you to the location of the Paper Toads.
The first quest is Paper Toad Hide-and-Seek. The Paper Toads are hiding all over the village. One is hiding on the item store's sign. Two are hiding behind a rock near the Lakitu info center and run off when you find them. Slide into them to catch them. One is on the item shop floor. There's one on the plant in the gear shop, and behind the shelf. Talk to the owner a few times to get him to notice the Paper Toad. One's in the know-it-all's house. Slide to catch him. One's hiding on the fence. The last two are in the fenced in area.
The second quest is Paper Toad Pursuit. The Paper Toads form three stacks for safety. They'll run off, so dash and slide. Catch one stack and the other two will split up. Push them together to form stacks to slow them down. Follow the trail of flowers to make them stack up. After the mission, Lakitu says the Paper Toads are hard at work on the papercraft. Go south to meet Toadette. Approach the papercraft Goomba and you'll find Toadette hasn't arrived yet. More Goombas appear and pick up the papercraft with ease. The bros run off a short distance, but someone has what they need. Toads carry a papercraft Mario. The bros jump on the hat. It's time to battle. The goal is to reduce the HP of other papercrafts to zero. Papercraft Mario's HP meter will go down if it takes damage. Move with the Circle Pad. Press [R] to turn 180 degrees, if you have to change directions in a hurry. Press [L] to make the camera face the same direction as Papercraft Mario.
At the start of the battle, listen to the rhythm and press (Y) in time to charge up the Toads. Use (B) to dash into the smaller papercrafts. Press (A) to have the Toads toss Papercraft Mario onto other papercrafts. If the papercrafts are clustered, you can combo the hits. Dash into brick blocks for coins. The item blocks have papercraft Mushrooms to restore papercraft health. Recharge the Toads if necessary. Defeat all of the papercrafts and Papercraft Megacrinkle Goomba appears. There's a smaller papercraft with it. Dash into them to knock them off their pedestals, then throw Papercraft Mario onto them. After a decent amount of damage, the Paper Goomba controlling Megacrinkle Goomba will get angry and will dodge your dashes more easily. Dodge its dash attack and wait for it to get dizzy to launch an attack. You'll get an Iron-Ball Hammer, DEF Mush Jams, and some items for winning. The Paper Goomba says he'll get the bros next time and leaves for the desert.