You need the peanut butter crackers first. If you don't have them, then you should go to the playground and climb up to the kid's clubhouse and play the go to jail game with big nate. After that, you need to go down to where the girls were standing and get the dog to dig there by bribing it with the crackers. It might take a few tries, but you will eventually get the time capsule and open it.
On Big Nate island the three girls stand on the playground to the right of the school .
near the playground
its where the talking girls are standing
Under the playground
where the chatty girls are.
The Treasure is on the ground where the girls that are ignoring you are
its where the girls were "yakking"
at the playground
under the girls at the playground.
in the middle of the girls on the playground!
Somewhere on playground
The capsule is beneath the school girls on Big Nate Island Poptropica.