It’s time to return to the downtown (second) area for this star, so it’s easier to just jump at the high point of the painting to get the water level to its highest. Once you do, jump over the wall and into the cage, then swim to the downtown area. Lower the water level there, then go ahead and locate the cage in the one corner. There are various ledges in the cage, allowing you to reach the top, where the star is located. However, to get into the cage, you will need use of the Vanish Cap. Thankfully, you will find one in the opposite corner, on the other side of the small building where you get the Red Coin star.
So, you will need to don the Vanish Cap and quickly reach the inside of the cage. It might seem like a tall tale, but those smaller walls in the middle of the area can be passed through with the Vanish Cap, so it makes it a lot quicker to get over there. Once you’re through the fence, you will need to perform a Wall Jump to get to the first ledge. The room in this little cage is kind of cramp, so a Side Somersault into a Wall Jump will be perfect. Upon reach the ledge, it’s just a few more simple jumps to reach the star.