Items: Sweaty Parts
Doc's Lab is full of computer panels and test machines all along the walls. You can investigate them to find the compatibility between any two people of your choosing, or you can check the fortune telling machine. Both are a waste of time. Your main goal should of course be to talk to Doc. He's just right of the entry way and looks like a giant pink tadpole with arms and a tacky hat.
Talk to him and you'll find that he's too busy to help. He's trying to fix a sick computer and he needs human machine parts to do it. However, the only option he presents you is disassembly of your drill. That won't work, obviously, so you'll have to figure out something else.
Head back to Monster Village and from there head through to town. Now talk to Cylinder and he'll force you to accept SWEATY PARTS. That causes your drill's level to decrease to one, but you need the parts so it doesn't matter. Some of the people around town will also comment on how much you stink. Leave Tiese Town for Monster Village again, then leave the village and head back to Doc's Lab. When you return with the Sweaty Parts in hand, you'll find that he's able to fix his machine. The curse on your drill will lift, as well.
Now that the computer is done, Doc needs to test it. He asks if you'll allow yourself to be the guinea pig. Go ahead and say "Sign me up!" and he'll open up the floor of his laboratory and explain the rules for his experiment (which is a mini-game). You must dodge all the lasers he fires at you. Touching even one laser will end his experiment prematurely. Each time a laser leaves the field, your score will increase. You must emerge with a score of at least 20 to emerge successfully.
After the timer counts down from three, the event starts. You can jump, which is what you'll have to do to win. Lasers start by coming from the right and left, rather slowly. You can jump them easily enough, but watch that your jump doesn't cause you to land on another laser (since sometimes two lasers will cross paths). Stay near the middle so that when lasers start coming down from the top of the arena, they won't surprise you and hit you before you see them coming. Eventually, you'll have to worry about both vertical and horizontal lasers, and as you manage to avoid 20 or so, the issue of vastly differing speeds will be thrown into the mix. It's not difficult to get that first 20, which is all you have to do for now.
Doc congratulates you on your success, then leaves to fix the elevator. It's time to head back to Sky Steps.