You can't get past the culprit or talk your way out of this. You're going to have to produce some sort of treasure to make the culprit happy.
Remember Lawrence's note about a decoy treasure? That would do the trick nicely.
Go forward, left, forward, then look for a hotspot on the left. Use the hook to reveal this smaller decoy treasure. Clever Lawrence!
The culprit is gone. What now?