After you save the town of KernSin from certain doom, you can go east to Windemere.
After the parade in Kernsin, go back to Terris and head east to reach the bridge that was formerly broken. You can now cross it to reach Windemere. If you talk to the locals, you soon learn that they are starving because they give all of their food to the ducks, which are considered holy.
There isn't much to do here. You can find a red potion, a blue potion, and a golden heart if you explore the region. Check the list of power-up locations to find out how to get these.
You will find a mysterious fruit tree with one golden fruit on it. If you attack the tree, you learn that it can talk. It will tell you, among other things, that a rock near the Duck Idol has a crack in it.
The Duck Idol is just south of Windemere proper. Follow the dirt road from the repaired bridge to get there. Buy a bomb in Terris, then go to the idol.
In the top-right corner of the Duck Idol area, you will see the rock with cracks in it. Use a bomb while standing next to this rock, and it will explode.
Loot the treasure chests. They both contain megapotions.
Now that you are here with all the holy ducks, you can quickly solve Windemere's food problem. Just kill all of the ducks. It's the only way to make the game continue. Once you have killed all the ducks, the townspeople will be aghast, but will quickly praise you for giving them a quick source of food.
If you exit and return to this screen, the duck idol has been replaced with a new monument.
You should save up to buy the Clawsword from the Windemere shop before proceeding. Now is a good time to visit Koka Isle. Go to the beach south of Windemere and look for some shells that form two vertical lines. Walk south between those lines and you will walk on the water. Explore Koka Isle and its giant ducks to your heart's content. You can talk to them too, if you want.
If you go all the way east, then fight your way north, you will find a treasure trove that contains a bunch of money, many potions, and a golden heart.
Slay Some Dragons
Now, back in Windemere, you can go down the stairs in the house with the three people. The stairs lead to the legendary Joppa Isle. Go inside of each house in Joppa Isle until you find a downstairs area where people are hiding. After the cut scene, go outside. You will have to fight a couple of dragons. Kill them with the Clawsword that you hopefully bought in Windemere. After that, the guy in the shop will sell the Throwing Axe for 3000 coins.
You can now get an audience with King Daniel, so go to Goodheart Castle and ask the guards for an audience with the king.