After a bumpy ride, you are dropped into Morningmist Valley right into a haystack outside of Highmoon Village's gate. Everything except a letter to deliver will be lost from the fall but you can find one of your flasks inside the haystack. Be sure to grab some wheat from the field before you visit the gate to the right.
Unfortunately, the two gate guards are uncooperative so you will have to find another way into the city. Farmer Greenberry is south of the haystack and mentions the guards have a weakness for sandwiches - your Sandwich Spell should be just what you need.
He will be much friendlier after delivering his letter, even giving you his family recipe for mustard: ground radish and vinegar. The vinegar is on the shelf next to him. He won't let you into his cellar though until you figure out a way to get him to leave. It may seem cruel but take the pet dragon's bowl as it will come in handy later.
At the farm to the right, you can find your Alchemist's Magnet. At the water wheel to the left of Farmer Greenberry, you can recover a stick jammed in the wheel that looks like it's part of the fishing boat. With the wheel repaired, the mill will once again be working to grind up wheat and radish for the sandwich spell. You will need to use the pet dragon's bowl in order to scoop it out safely. If you turn the wheel on the tube, you can get the water flowing again. Back at the farm field, you can turn the watering snout to water the apparently very fertile soil to watch some lettuce and radishes grow right before your eyes. You're well on your way to collecting the ingredients for the sandwich recipe but you still need a bit more.
Back at the haystack you can find a ghost who may be able to help get rid of farmer Greenberry if you can only find him a body. Maybe the scarecrow at the field will do? He won't be able to travel alone so carry him within a flask.
Inside the cellar, you will find a lot of valuable items that will be needed later on. The Acme Cheese Maker will create the final ingredient for the spell but it's missing milk. With an empty flask, return to the haystack and milk one of the sheep there. Return to the cheese maker in the cellar and press the lever after adding the milk to get the cheese ingredient.
Now you will have everything you need to make the Sandwich Spell: Mustard (add the Vinegar to Ground Radish in the bowl), Ground Wheat (grind it at the water wheel), Lettuce and Cheese. Fill a flask and click it on yourself to get the sandwich out. Use it at the gate to get past the two "uncorruptable" guards.
Summary
Get the flask from the haystack
Give Farmer Greenberry the letter and grab the vinegar next to him
Take the pet lizard's bowl
Recover the stick from the water wheel and open the pipe valve
Water the crops with the snout then take the lettuce and radish
Get some wheat from the field by the haystack
At the water wheel, make ground wheat by putting the wheat below the masher and scooping it out with the bowl
Make mustard by grinding the radish at the water wheel and adding vinegar to it in the bowl
Put the ghost at the haystack into an empty bottle
Put the ghost into the scarecrow at the farm field and he will scare away Farmer Greenberry
With an empty bottle, milk the sheep next to the haystack
Use the milk in the cellar's cheese maker to get the cheese ingredient
Combine the Mustard, Ground Wheat, Cheese and Lettuce into the cauldron to complete the sandwich spell
Put a sandwich on the ground outside of the gate to distract the guards
