The six Kindergartners are in the following locations:
- Outside Mr. Slave's house
- In the sewers
- Inside the bank (behind the desk at the top-left)
- Outside the tower of peace (behind a lamp post)
- Starks Pond
- The farm (Bottom left corner)
They are a side-quest, and are not required for continuing on with the main quest. Although they do boost your friend list by 6 once you do find them all and return to the park.
... aaand it's NOT gone, as it turns out!
While, yes, this is callback to the Margarita Ville episode, you can get your money back! After you gain the ability to shrink, you can go behind the counter through a mouse hole and hit the banker with your melee weapon to start combat. Once you beat him, his body will have an amount of coins on him equal to 150% of your total investment.
While I was not expecting to get my initial $20 investment I made near the start of the game back, when I first beat him he had $30 on him. So I quickly reloaded the auto-save, invested another $20, beat him, and his body had $60!
The upper limit on investments is $60; he will take more, but it will not increase the loot beyond $90. This seems to be roughly consistent with the number of variations in his investment spiel, so once he proclaims the you are an experienced and sophisticated investor, do not invest any more money. The banker will not respawn after you have beaten him, so this is a one time withdrawal.
As @LessPop_MoreFizz pointed out in the comments, while the base value of his loot is 150% your total investment (for a maximum of $90), you can further increase it by equipping armor and patches that increase money rewards. So by equipping the full pre-order assassin set, and a bunch of magnet type patches (Small Magnets, Buckyball Magnets), you can increase the return on your investments to $150!
Best Answer
You must set Jimmy as your active buddy and then head to the farm. If Jimmy is your active buddy, the Rancher will be there, and after some dialogue he'll give you the key to the barn.
Unless you can soak a lot of damage or have the means to take out a couple enemies in a single turn, I highly recommend keeping Jimmy as your buddy for the fight in the barn, as his ability to put enemies to sleep is highly useful in against the group inside.
After that, just climb the ladder and retrieve the flute from a chest on the upper level.