You use it when the time comes. In the Production Zone (far right, across the Drawbridge) you recover the Steam Motor and the key to the Living Quarters. To escape, you climb up and smash the glass dome with the mallet. You will also need the dirty beaker from the upper right inside the Museum.
it is in sully's steam powered paraphernalia
It is in a junk pile inside Sully's (to the left).
you break it with your rubber mallet.
Idk but im right here with you i totally forgot it
You find it on the island al the way to the left.After that, you break it with the mallet and pour it on the hot thing to get into the building
You return the key and the alarm will turn off and go get the mallet and come back and get the key.
its in the museum on mainstreet of steamworks island :)
You have to leave through the roof dome, so you need the mallet from Sully's to break the glass where it is cracked (upper left).
It's Steamworks Island #14th Island
(The solution is at the related question "How do you beat Steamworks Island")
the crab on steamworks island is next to the living quarters
You go to Steamworks and head to the museum and there is the Deogen