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(If you do'nt have the empty bottle, exit the Lighthouse and go to the house with the two sick old people in the southern part of Imil. The bottle is located in a chest in the northwest part of that house.)
Go up to the fountain and use your Empty Bottle item on it to fill it up.
Now that you have Herme's Water, head down and out of the Mercury Lighthouse.
Then head back to Kolima forest.
Talk to Tret then give him the Hermes' Water. Suddenly the forest will light up and Tret will revive the people of Kolima to their original state.