After scratching Larry's nose, head east to the southern coast of Witchaven and choose Inspect on one of the giant footprints. They are just a little south-west of the quest icon there. If you follow the south wall of Ardougne to the east, then pass the dock, you will come right to them. Upon searching, you gain 300 Hunter experience. Go back and talk with Larry. You, the Chief Zookeeper, and Larry talk about the giant penguin, and you watch a cutscene where the three of you inspect the footprints and Larry is released from his straitjacket.