Get Guaka onto one of the areas marked by an arrow. Then you need to fire Momonga towards him so he gets a boost up onto the upper level. When the blocks move backwards, fire Momonga around the ledge so that he turns the cogs. Repeat until the platform's been raised, then fire Guaka into the chunky blocks at the top of the screen to open up the path ahead.
Don't try to catch Momo by holding a flipper upright - this will result in misses as often as it does catches, especially on the game's shorter boards.
You need to use tilt controls to steer him left and right towards the next part of the island.
If you see cracks in a portion of the wall, send Momo flying at it. Chances are good it's a hidden stash of coins or a shortcut.
The physics can seem a bit fiddly at first, but Momo behaves the same way in every level. Play through the early stages a few times until you learn how to launch Momo in the direction you want him to go.