1 First upgrade
Requirements: Power Glove
Once you’ve obtained the Power Globe, return to the Mysterious Forest. Within the Mysterious Forest, there is a log tunnel that originally led you to the Magic Mushroom. One screen to the north of the eastern end of that tunnel is, along with a Moblin and a Sword Moblin, a lone rock that can now be picked up. Do so to reveal a hidden staircase under it.
Below ground, you’ll discover a rather curious little shrine, and there’s a green pit atop the dais. Toss some Magic Powder into the little bit, and you’ll awaken the Mad Batter, who’s none too excited about your waking him up. To take revenge upon you, he’ll increase the inventory of one of your expendable items.
By default, the Mad Batter will double the amount of Magic Powder you’re able to carry, growing it from 20 to 40 sprinkles. However, you can tell him no when he asks if that punishment is befitting you. If you do that, he will instead alter the punishment to Bombs (60 instead of the normal 20) or Arrows (again, 60 instead of the normal 20) before cycling back to the Magic Powder. As a result, you can technically get the upgrades in any order you want.
2 Second upgrade
Requirements: Roc’s Feather and Flippers
Southwest of Catfish’s Maw and Martha’s Bay, you will find a telephone booth just off the shoreline. Head southeast from there to find a large block of bushes separated from you by two (sometimes three) consecutive holes. If you have the Boomerang, you can cut through the grass on the other side and then hop over the holes with the Pegasus Boots; however, neither the Boots or the Boomerang are necessary.
Do a running start and then jump with Roc’s Feather over any section with just two potholes (as opposed to the ones with three). Swing with your sword while midair, and you will clear away a landing spot on the other end. It is actually legitimately possible that you can, on that very leap, clear the two-hole gap, especially if you hold right as it is possible to tweak Link out of a hole if he’s close enough to the edge. If you happen to fall, however, you can always use the Pegasus Boots in conjunction with Roc’s Feather one a subsequent try. Once you’re across make your wait to the stairs down.
The next area will have some deep water filled with Angler Fries. Just swim past them and make your way to the exit at the end of the tunnel. This will bring you back above ground enclosed within a secluded meadow between the trees. Head west and descend down a different staircase. This will bring you to the Mad Batter’s lair, where you should sprinkle some Magic Powder over his well.
3 Third upgrade
Requirements: Power Bracelet and Hookshot
Deep within the Tal Tal Mountain Range is the third upgrade point. This one requires the most steps to find, which is fitting for the last one of the three. From the Hen House near the top center of the map, head west. Use the Hookshot to cross over the dilapidated bridges until you reach a dead end at a cliff. A single bush will reside upon that bluff, and it hides a secret staircase beneath it. Naturally, you’ll want to enter that cave.
Head west from here, avoiding the Keese and the Spiny Beetle beneath the skull. Eventually you can hop down into a pit, leading deeper into the mountainside. From there, the only obstacles in your way are a gap over which you’ll need to Hookshot and a few more Keese. Once you reach the next cavern exit, head outside.
In the western half of the Tal Tal Mountain Range, you’ll have to dodge Boulders while being plagued with Mini-moldorm bouncing around the switchbacks leading up to the next plateau. Once you reach the top, the Boulders will stop falling down from above, and you’ll just have to deal with enemies. Head west one screen, and you’ll find a treasure chest containing Rupees. If you lift up the rock that’s on the same screen as this, you’ll find a secret tunnel that will lead to the familiar shrine. Sprinkle some Magic Powder over it to awaken the Mad Batter.