Found a bug: if it is an ally's turn and their HP is reduced to zero while you are selecting an attack, then you cannot attack for the rest of the battle with any characters (which equals an automatic defeat.)
Crest21: Sounds like you have the infamous Internet Explorer Flash game sticky buttons problem. I've played it on Firefox and Chrome and do not have the problem you described. (Or you could just be sliding on the ice.)
Baby goes to lady that is beyond the guards. Use sleeping pill on guard leader (turn right from guards and go upstairs) to get his hat and get past guard.
Hint for Section 3: You can click the tree in two places: on the large hole on the root and the very end of the root where it goes into the ground.
(Took me 15 minutes to figure that out.)