The strategy for The Cursed Treasure Level 4-1, Red Parrot Tavern, is steal the drink pitcher from the table above. Bring it upstairs and fill it with either milk or fire-water. Put the pitcher back on the table, then pull the rope behind the captain. After drinking milk, the captain will throw his pocket watch; after the fire-water, the skull and crossbones flag will burn, revealing a ship in a bottle. Both items count toward the treasure objective. Finish off by giving the captain the sleep aid to grab the golden monkey idol. The other two hidden items are a spyglass in the locked chest in the bottom level and a die obtained by beating the cup-and-balls game in the top-left corner. Our friendly ferret camps on the roof above the skull and crossbones.
If you have a different strategy for completing this level feel free to leave a comment below. Be sure to check out the rest of our Tiny Thief walkthroughs here.