After fixing up Scrapper, fly over to Fun Fun Island. It is found to the southwest of Skyloft. There, you’ll find the owner, upset over the fact that his Party Wheel, essential to his business, has fallen below the cloud barrier to the surface below. Once you agree to help, the Party Wheel becomes a dowsing option.
Now fly to the Lanayru Desert and land at the “Desert Entrance” Bird Statue. Get rid of the rock pilings nearby with Bombs to find a Timeshift Stone. Hit it and climb the vinery further along, then go along the path to a wall you can grab and hang on. At the other end, go further to the Party Wheel.
Examine it and send Scrapper to pick it up. Go back to the sky and hand it to the owner of Fun Fun Island to finish it up.