With a fully assembled teddy bear, return to Tedworth in Mean Street South, and he’ll be ready to leave Horace. Speak to Horace, and he’ll ask you to find him a new assistant. At this point, you have two options for finishing the quest.
For option number one, speak to Barnacle Jones once you reach Ventureland. He needs his compass back from Scurvy Pat before he becomes Horace’s new assistant.
Scurvy Pat can be found in the same area. Thin him out to obtain the compass, and return the compass to Barnacle Jones.
Now return to Mean Street South and speak to Horace to complete the quest.
For option two, speak to Ortensia. She’ll tell you that Clarabelle is the better choice for Horace’s new assistant.
Head next door and speak to Clarabelle. She’ll need her Splatter to be happy before she’ll become Horace’s assistant. Give her the Flower Costume Hat (obtained during the story in Fort Wasteland), and she’ll give you the Very Messy Thank You Note.
Speak to Horace, and he’ll tell you he is nervous about giving Clarabelle the job.
Acquire Barnacle Jones’ compass by photographing Scurvy Pat with it. This time, take the compass to Horace. He’ll ask for any suggestions on new assistants. Now you can give him the Very Messy Thank You Note and finish the quest.