"'Cause I got two shoes, see?" says Lou. That doesn't actually help you, since everyone else around here does, but you can tell you're not actually going to get any information out of him without giving him a good reason to tell you anything. You decide to drop the topic and get to the actual reason you came. "Anyway," you say, "Horatio sent me." Lou pales. "Right, then...um, how can I help you?" he says, laughing nervously. "He's not here, is he? Heh, he knows I wasn't hidin from him, right? Was just tryin' to lay low and all that, ya know? Listen, I really shouldn't be talkin' to you, but I owe Horatio a favor or two, so I might be able to point you in the right direction." Abruptly, he picks up a nearby object that looks like a rock, but is big enough to conceal you, then hands it to you. "Take this to the back of the Jangolode Mine, southwest of here, then hide in it."
Accept. Head off to the Jangolode Mine. Decline. This could be a trap. Besides, you might be better off taking a look around here instead.