There are a lot of side quests to do in Psychonauts 2, which your companion like Lily give you. She wants you to find a rare fungus. Finding this fungus can be a headache. Fortunately, there are many ancient caves around the Motherlobe, one of which has this fungus.
To get Lili rare mushroom, you must go to the Questionable Area. Depart from Lily’s secret garden in the Motherlobe and head to the Questionable Area. When you get there, you need to turn left to go to the Funicular. This area has been marked on your map with three cogs in this area.
When you repair the Funicular ride it to the top of the mountain and walk to the right. You have to reach the waterfall through the obstacle. Go up the waterfall and use the Temporal Bubble to slow the logs. If done correctly near the top of the waterfall you will see the path, a cave. Inside the cave you will find purple rare mushroom.