That is a dungeon that you get to by taking a balloon car and talking to Baxter inside. He will send you down to fight an O'Leary boss and get the code to open the door. After you defeat that first boss, turn around and DON'T leave. Instead, look up. The code is written above the doorway: Snake, Bird, Bug.
Light up the chimneys in that order, Snake, Bird, Bug; then flip the lever. The door should open.
After you get through the factory, there is another door that requires a code. Again, the code is visible on the wall right next to the door, so just follow the clues that are already there. There are four panels on the floor that you have to light up in this sequence: Bird, Moon, Tree, Bug.
This guide should help you get through the whole thing.
Alia Misthaven