You have to defeat the robot bosses on the 3 planets that are on the list the Queen gave you:
Jungle (X-15 Y-15)
Ice (X-73 Y-83)
Fire (X-83 Y-20)
Once you have defeated the three planets and have the three Space Knights with you, you can travel to the Giant Asteroid in the Asteroid Belt (X-11 Y-84) and follow the trail to the Princess.
You defeat Mordred and his robot warrior suit, and return to Arturus to receive a knighthood from the King, along with the Island Medallion.
(see related question)
You do not get or use a bucket on Astro Knights Island.
There is no treasure chest on Astro Knights Island.
Actually, Merlin has little to do on Astro Knights Island. He recovers the fuel rod from the dungeon when the robot self-destructs. And he battles Mordred at the very end of the island.
There are no bird eggs in astro knights island.
its on the island
How do you talk to the girl in the hay loft at astro knights island?
You can't. That only happens at the end of the game.
On every island you have to be the one to save whatever needs saving. That includes the kingdom in Astro Knights Island.
Once you have built a new spaceship on Astro Knights Island, it will park on top of the castle whenever you leave the island.
Astro Knights
With Mordred
it is in the left