The second badge can be obtained in Aveh. On the floor the level of the hotel, you'll see an archway. I don't remember if it's here, but go through this to find some kids playing hide and seek. Talk to them and choose to play with them. Since you're the 'it' you have to go and find them. It's actually pretty easy to find him around town. Just get a good look at his clothes, and you'll spot him anywhere. He might be hiding at the edge of the town, just before Northern bledavik, but he'll never get farther than there. When you find him, he'll hide again. Just continue finding him and finding him. I think the final hiding place is the well near the hotel. He'll finally give up and give you the H&S badge, plus the clue leading you on how to enter the palace grounds.

The final badge is in the orphanage. The first time you get here, you'll see chickens running about. Go into the chicken pen and talk to the kid inside wearing a chicken costume. You'll have to help him get the chickens back. The trick is to talk to the chicken and walk a small distance towards the pen. The chicken's supposed to foloow you everytime you talk to it. You have to get it inside the pen. Be sure to close the door of the pen everytime you get a chicken in, or they'll get out again. Talk to the chicken-kid everytime you get a chicken in the pen. Once you get all three chickens in, he'll give you a Tag badge.

Exchange all your badges to an old chu-chu in Shevat. You can find him in the room full of chu-chus.