You need to get Expert Water Magic. Either free the guy in prison or upgrade Dess. From where you start the game, go up. There at the witch's tree (where you get skills), there is a skill slot filled only with water. If you don't want to fill a slot, then further up is the prison with the guy who has Expert Water.
Guys, how and where do you assemble the Admiral's Hat?
Thank you so much!!!! I somehow didn't catch that - completely forgot about Expert Water...
As for assembling the hat - run as Dess to the very top-right, where the Inferno is located - nearby is a mage's hut - basically a tree, they give you one part there, then run to the far left corner - where the garrison is - wipe out the garrison and descend into the Dungeon - there is also a guy sitting in a tree - he will give you the second part - presto! - and the Admiral's Hat is ready.