The crab with the giant chip cone, Kermit, is blocking your way to the end of the beach.
It needs help, you have to get rid of the gulls. After the gulls are gone go deal with Kermit.
Unlike normal walkthroughs, in Nice Game Hints you can select just the puzzle you want hints for. Here are listed the puzzles for "Helping Kermit the hermit" in Lucy Dreaming. The guide you choose only contains information about that puzzle, reducing possible spoilers for other puzzles.