The bros exit the dungeon through the pipe to the Twinsy Tropics, a tropical paradise where there are many Koopas. One Toad doesn't know where they are and wants to return to Peach's Castle. The Toads agree to scope out the area in the meanwhile as thanks for saving them. There's a Toad Village to the west, but many Toads are too scared to venture out there, due to the Koopas. Go east and you'll find a dead end with a Grab Pole. Use the Trio Grab to grab the pole across the gap to reach a new area. Walk to the south and you'll see a rock formation with a gap. Send Paper Mario through for an item block with an accessory for him. There's a donut-shaped area to the east with coins and Supersyrup Jars. Walk around for more item blocks with coins. Return to previous area.
Battle the Koopas and head west. Send Paper Mario through the gap for another accessory, this time for Mario and Luigi. Nearby is a Toad with a quiz. He's pondering the other side of the ocean, so he'll quiz you later. Go north to the Toad Village. There are more Koopas here. Walk to the west to the dock and you'll find a sad Paper Toad who wants to fold up into a boat and sail home. He notices the bros and is startled, as that soliloquy was private. Mario expresses interest in crossing the sea and the Paper Toads says he could make a boat. He needs more Toads and there's a Lakitu Info Center to the east. In the red Toad House, talk to the pensive Toad and he'll say some Toads didn't make it out of the dungeon. Offer to save them and you'll be warped there.
The Toads are freaking out. They must be corralled into the safe zone within the time limit of three minutes. There are blocks you can hit to add time. Clear out the ores and build bridges to herd the Toads. It can be a little tricky, but you'll need to clear out most of the ore, as Toads are hiding behind it. Back in the village, there are three shops. The green shop sells Battle Cards. Go east and you'll find Cheep-Cheeps and Urchins to battle. The Urchins won't attack, but if you do, they'll explode. Guard with (X). At the Lakitu Info Center, which is brand new, there are a couple of missions.
The first one is Tropical Paper Toad Hunt. Some are held by enemies, some must be chased, and others are trapped in bubbles. Approach the bubbles to make them lift in the air, then activated the orange spring platform to pop them. If they don't lift into the air, use Trio Grab. Sometimes, just being in Trio Grab's tower formation is enough. Others are hiding past the gaps in rocks. Flip over rocks with Trio Hammer to find more. For the ones in bubbles on the east side, dash when the bubble is close to the ground. Fly Guy Patrol involves rescuing the Paper Toads without being spotted by Fly Guys. You can be spotted twice without failing, but you'll be placed back at the start. Just follow the path. Once you save them all, there are enough to make a boat.
I decided to go east first, but you can't go very far. Meet the Paper Toads at the dock. They've built an impressive ship and are thrilled to get off the island. They won't be riding in the boat; the Lakitu will take them to Peach's Castle. Before they set sail, Luigi invites on the Toads from the dungeon. Paper Mario becomes the sail and they get underway. Unfortunately, one Toad is left behind. They dock in Sunbeam Plains. The Toads notice the changes and say to check out Peach's Castle.
Use the Trio Grab to cross the water. There are Monty Moles here. They throw rocks while getting closer to the bros. Keep going west and you'll find a Lakitu Info Center. The Lakitu the bros met outside Peach's Castle is here. He says the pipe in the Info Center is open. It leads to an arcade. You can redo boss and papercraft battles, or put your Bros./Trio Attack skills to the test for points to use in the gear shops. Go west when you're ready. A Toad will appear when you cross the river. Something's happened at Peach's Castle. The bros should go see for themselves.