You have to have his heart at purple before you can trigger the event. Keep giving him curry, things you can find in the mine like bracelets and earrings, etc, to raise his heart level.
Once it's at purple, go to the Blue Bar on a rainy or snowy Monday from 6 am to 11 am to trigger the first part of the event. Muffy and Griffin will read to you a letter from the Phantom Skye, and ask you for your help. You must return to the Blue Bar later that night from 10 pm to 12 pm to trigger the second half of the event.