Alright, here's how it works. You go out to the cacti field and you look for a cactus that has one of its arms pointing downward. Stand in front of it (one tile directly down from the cactus) and walk left until you hit the wall. Plant the TNT, and you'll find the cave you're looking for.
Also, don't miss the spot on the cliff marked by two rocks (it's near the bottom-leftmost corner of the field). Blow that one open for a Heart Container.
It's hard to be serious when you've got bananas in your ears... and yet Mike pulls it off!