Go to the log cabin. The huge tree with the stone wall encircling it is actually an elevator powered by steam and is the focus of this puzzle.
Inside the log cabin is a safe. Enter the combination, (7, 2, 4) pick up the matches inside and light them using the matchbox. Move to the furnace and light the pilot light. It's located at the bottom left of the machine. If your match goes out, worry not. Just light another one. There's an infinite supply.
Turn the red wheel to the right of the furnace all the way up. This takes quite a while (I counted over twenty turns). Once the steam gauge shows full steam, wait until the lifting noise stops. This signifies that the elevator has reached full height. Turn the red wheel the opposite direction to lower the steam pressure by half (or twelve "squeaks").
Go to the tree and watch as the elevator comes down. Enter it as soon as you can. You will be carried underground. Before you is ChannelWood's linking book.