Find: Yoshiyuki, 1 Power Source, & Drill Arm.

Go west around the mountains, and then turn north. Go up to Rocket Town and enter. Buy weapons and accessories in the first shop to the left. The shop on the right is an Inn. The store with the old man outside is an Item Shop. Talk to the old man twice. The second time, pick the first option. He gives you the Yoshiyuki. Check the house to the right of this for a chest with a Power Source (in the room down from the entrance).

Go in the top house to get a Drill Arm (the room up and to the right from the entrance). Go out back to find the Tiny Bronco. Here you will meet Shera. Now exit the house and go up to the rocket. Go left and climb the long set of stairs. Then climb the ladder to the top of the rocket. Go right, then inside the rocket and talk to Cid. Pick the top option to find out about the rocket.

Return to the town and try to go to the Tiny Bronco again. Shera comes in and then Cid does. Shera tells you the story of how she screwed up the launch. Go outside and see Cid with the President. Go out back and talk to (fight) Palmer.