A Link to the PastDwarves' Smithery at the east part of Kakariko Village. There is a cave found here, but the door inside is locked. However, after Link acquires the Magic Hammer, he can pound the peg, allowing him to jump down into the well below.
In the well there is a shrine where two green stone hands are grasping a stone bowl with a red liquid in it. If the bowl is sprayed with Magic Powder, then Mad Batter will appear. He is angered at Link for waking him from his deep, dark sleep. The Mad Batter says he will get his revenge against Link by taking away half of his magic. However, the Mad Batter does almost the opposite and reduces the amount of magic Link uses by half. Basically, doubling the amount of magic Link can use.