Before I start discussing Collosso, here is how to get the general Psynergies listed below: Growth - Equip an Earth Djinn on Garret Frost - Have only Water Djinn active on Mia. Also try equipping the Frost Gem.
When you get back to Tolbi, head to the castle which you can get to by going up the stairs in the northwestern part of the town. Head into the room with the beds that, if you remember, you can get to by entering the small door on the left. Once you're all rested, head out of the castle and go north up the main path in the middle of the town. Here you will reach the stadium. Head up the stairs on the right to have the guards recognize you and take you to the briefing room. Here you'll be told that only Isaac is entering the finals, and the rest of your party members can only cheer Isaac on. However, the other party members will have important roles. Before each round begins, there is an obstacle course that you have to get through quickly in order to get the best weapon in the center rink. There are also nuts and oil drops in treasure chests that you can get that will help you a little in battle. So, the characters get to use 1 Psynergy before the match begins and can do useful things such as grow vines to find shortcuts and freeze ice to hop over easily. Once all the guards stop talking in the preparation room you'll be taken to the stands of Collosso. He'll explain the rules of the obstacle course. Now, go up to the first guard and get him to explain what the first event is like. He'll show you a snippet of what the first leg is like, then ask if you want a friend to cheer you on. Select Garret for this task. The next stage you'll want Mia to go cheer. The following one you'll want Ivan, but make sure that he has a growth spell on him. Take a look at the 4th and final leg of the course, although you won't need anyone to cheer for you there. Now, go all the way back to the guard who's along the south wall. Talk to him to go back to the Preparation room.
In this room go over to the circle that's all the way to the right. Step on it and watch as the contestants are told that the matches are about to begin. Once you leave the preparation room, you'll take command of Garret in the stands. Use his Move Psynergy to move the stump to the left. Have Ivan use grow on the vine, and have Mia just talk to the guard to say that she's ready for the match to begin. Now you will take command of Isaac. As soon as you can save your game in case you lose against the competitor you're facing. In this first round simply jump over the gap thanks to the stump that Garret moved. Right after there you'll see a stump that's in the way of a path. Move that to the right and go up to get the treasure chest. The next leg has a pipe that you need to push west to make the water flow. Once you do that, jump across the gap thanks to the now elevated platform. Now, go further right and climb up the vine that Ivan grew. When you get up here you'll see a path going north that gets to a treasure chest that you'll want to get. The next screen has two logs. If you just want to get across and don't want to get the nut this is very simple. However, if you want to get the nut (I recommend it because the other guy is slow getting there) take the vertical log right, then go up and take the horizontal log down. Get off that and take the vertical log back left. Now, climb back up the ladder, take the vertical log right and hopefully you'll get there before the other player. If you get there first you'll get the iron shield which will help in your defense.
Your first enemy will be Azart. The first thing you'll want to do, like always, is cast your one and only summon against him. Judgment will do about 315 damage to him. Now you'll want to use Ragnarok against him for the next round. You'll now be down to about 50 or less HP, so you'll want to use Cure Well on yourself. Continue using Ragnarok and Cure Well on him, with the occasional helpful Djinn if you need it. After he wastes both his nuts just keep pounding him until he goes down. He really shouldn't be overly tough, and you should get an easy first round victory.
Once you win you'll be taken to the next set of stages where once again you can get your characters to lend a helping hand. Take this time to put all of your Djinn on standby. Take a look at all of the stages first to get an idea of what they're like. In the first stage you can get Garret to cheer for you, but moving the statues around isn't going to help you one way or another. The second stage doesn't require anyone in it either. Put Mia in the 3rd stage. No one can help in the 4th stage, so don't worry about it. Stick Ivan at the 5th place simply because you need to put him somewhere and head back to the guard at the entrance to the stands. In Lend A Hand mode have both Ivan and Garret talk to the guard to say they're finished. Have Mia freeze the western puddle and then get ready for the match to begin.
As always save right at the beginning of the Obstacle Course. The first screen is very easy to solve, just head around the blocks. On the next screen, make sure you jump twice when the blocks are in the center. When you get the western most block, head up and get the treasure chest which is a nut. Head back down onto the block and continue left. On the next screen take the bottom log left. Head down the stump to the ledge and hop over the ice pillar to the other side. On the next level climb the wall. When you get to the top head left and slide down the MIDDLE crevice. Hop over to the next screen which is a simple log puzzle. Basically you just have to move each log twice, once to the left then once to the right. You shouldn't have that much trouble getting to the rink first.
It's now time to fight Satrage. This guy has a little more HP than his predecessor and does a little more damage. Get him with Judgment right away, then use the Ragnarok/Cure Well strategy that you used before. Once again he shouldn't pose that much of a threat to you. Once you beat him you'll once again be taken the next set of stages. This one is pretty dang hard, so make sure to study all of the stages before you start.
As usual, inactivate all of your Djinn before you start placing your friends. In the first stage you'll want to put Mia who has freeze. In the next stage put Garret who has move. Don't place anyone in stage three, nor stage four, nor stage five, and just stick Ivan at stage 6. However, if you have the Halt Gem (found in Vale) stick it on Ivan and stick him in Stage 3 with the moving wedge blocks. Head all the way back west to go the guard to start the next match. When you start to Lend a Hand have Garret move the stump one to the right. Have Ivan use Halt on the man pressing the lever, and have Mia freeze the puddle that's under the moving lever.
It's now time for the Final Round obstacle course. This one is the toughest yet. On the first screen just run past that log and hop over the two gaps. On the next screen hop to the first stump, then head down to the stump that Garret moved for you. Keep going right until you get to the next screen. This next stage is pretty tricky if you didn't have Halt to freeze the man controlling the pillars. Take you time going past the moving traps that will push you off. If you get really good you can get past two at a time, but don't push your luck. Ignore the easy to get treasure chest because you'll need all the time that you can get. The next stage, the wall, is pretty straightforward. Just climb primarily sideways until you get to the top. Go down the stairs and run across the conveyer belt. The final stage is another log maze. On this screen, DON'T PUSH THE LOG WHEN YOU GET THERE. You'll lose a lot of time if you do this. Instead, run past and push all three logs to the top, out of the way of the log. Then push the vertical log into the water and hop across to the rink. Hopefully you'll beat your competitor and get ready for a battle.
It's now time to battle Navampa, the final Collosso competitor. He'll have much more health than the others and do more damage. Use the same strategy that you've used for the previous two, summoning firs then using Cure Well/Ragnarok. Even though he has more HP and does a little more damage, he's really not too hard to beat as long as you remembered to inactivate your Djinn so that you had a 4 Level summon available. Once you beat him you'll collapse from exhaustion and eventually end up in your bed in the Castle. The characters will be annoying as ever and start talking about how you collapsed after Collosso. Once you're finally done and you're back in command, head out the door to that room and go up the stairs. Go up the hallway and through the big door to meet Babi once more. He'll start talking about how he needs more draught and that the only place to get them is an island long disappeared. Then he asks you to go to Babi lighthouse to find the island. He'll also give you the Lure Cap which you can use to encounter more monsters than you usually do, which is useful in leveling up for bosses.
Once you finally get command back of your character, follow Babi off to the west and down the stairs. Go through the door and take the item on Babi's desk. This is Babi's sacred Cloak Ball and he says that he will lend it to you. It's now to time go rescue Lord Hammet from Lupna.