Linda hypnotizes Pete to impersonate a chicken every time anyone says 'now'. Unfortunately, she doesn't know how to make him stop again, and Gribbs, Tiger and Rabbit decide to take advantage of it.
It's the annual Bird Man competition, and the residents of Port Niranda are trying to fly in a wide variety of home-made machines. Bronson discovers a strange hat that makes the wearer copy whatever they see happening.
The river's water spirit isn't so keen on Gribble's latest scheme to build an aquatic resort, but when she sees Bronson throwing stones into the river, she thinks he's responsible.
Lemons have mysteriously grown overnight on the tree outside the lighthouse, and Nell explains that the remains of a fox her grandfather killed were buried there.
Senator Gribble intends to cut down the forest and the only thing standing in his way is Nell's claim that the forest is home to a rare breed of mushroom.
Pete finds himself locked in toilet haunted by a ghost who desperately needs to convince the Inspector that he can really scare people in order to get promoted to a better home.
Nell asks Bronson to take a valuable opal to the jeweler's to sell, but before he gets there, a goat eats the opal, and Bronson must wait for it to come out again.
The ghosts realize that the conditions are right for them to save their ship which sank a hundred years ago. Matthew possesses Pete in order to turn on the lighthouse lamp.