After you defeat the Scorpion Army's robot, Kilroy, you should take the Water Seed back to the Water Palace.
Be sure to buy Cobra Bracelets in the Pandora armor shop. They make you immune to poison, which is very helpful against the next boss.
You may also wish to level up your weapons to the highest level. Weapon leveling is based on number of enemies defeated and has nothing to do with the strength of the enemies you fight, so do your weapon leveling in an area with weak monsters. I did my weapon leveling by walking from Pandora to Kippo Village (which is just south of Gaia's Navel) and back again.
Return to the Water Palace
The Water Palace is north of Pandora. If you don't take Cannon Travel, you can just go south from Gaia's Navel, southeast to Pandora village, then north from Pandora and northwest to the Water Palace.
When you arrive, you find Iffish in the water, and Water Thugs guarding the door of the palace. Not a good sign. Defeat the enemies and enter the palace.
There are more Water Thugs inside. Go to the Water Seed area to find Geshtar and some Imperial Soldiers holding Luka captive. Geshtar threatens to kill Luka if you don't give him the Water Seed. When asked what you will do, choose to Run. Geshtar will block you and then send Jabberwocky to attack you.
Jabberwocky is weak to Fire, but you don't have fire spells right now. Jabberwocky is strong against Water, so you have to use Gnome spells, such as Earth Slide. Have Popoi attack repeatedly with Earth Slide while Randi and Primm attack with the strongest weapons. Use the Action Grid to tell them to charge up their weapons to the highest level.
Jabberwocky uses the defense-reducing attack Acid Storm. It also uses Poison Gas, but if you got Cobra Bracelets in Pandora, you're immune to that. Jabberwocky can knock you out temporarily if it hits you with one of its heads. Heal up if you go below 50HP.
You receive the Bow's Orb after defeating Jabberwocky.
Go up to the Water Seed to seal it again. Luka will tell you to go to Sage Joch in the Lofty Mountains before reactivating the Mana Seeds in the world's palaces.
Be sure to talk to Jema. He gives you the Whip's Orb. Then he tells you to talk to the Cannon Travel guy near Potos. He will send you to the Upper Land, which, as you might recall, is where Popoi said he comes from.
Get the Midge Mallet
Go to the Dwarf Village and talk to the Elder, who is standing near where you found the Thieves' Ship. He gives you the Midge Mallet.
Go to Upper Land
Go to the Cannon Travel location just south of Potos. Ask to be sent to Upper Land.