EcStaCy has written
I did read the letter he left me, but I don't find anything that looks like a hat, I have also knocked down all the trees so if the tress made something look like a hat there is no more trees
Spoiler First of all, check out the runes. Press [e] on a square looking one (there are two, but only one is it). Then you will know the rest of your quest.
Second, the hat thing has nothing to do with the main quest of getting off the island.
Lastly, what could possibly look like a hat? well, it is very obvious (well to me) that it has to be the "Well". You go till there are a few flowers around you (not even a lot). Then, you go towards the water which is the first element (since nothing else could possibly be it). Lastly, face the direction it tells you, walk and dig till you get the items (which don't matter at all).