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Your ship has been damaged, and you have to make an emergency pit stop to get it fixed. Explore a small town and get all the parts that you need to take off again!
The zuul.exe file was compiled for windows with mingw, so it is meant to be run on windows shell, not the cygwin emulator. I have not tested it but I am guessing that it wont work if you run it on cygwin.
Spoilers!!
In order to complete the game you need to reach three goals: fix your ship, get supplies, and get a new engine.
To fix your ship, talke to the shipwright and go to the alley through the south of the forest. After finding out it's locked, return to the shipwright to get a crowbar, and then return again to the alley. After this, grab the whiskey in the cellar, and return with it to the shipwright, then meet her at your own ship.
To get supplies you must first find 10 coin. The first three you start with, one is found on the south coast, one is found at the statue, one is in the cellar, two are gotten from the woodworker for bringing four wood, which is found in the woods. The last two are given by the shipwright. After this, go to the tavern, to trade your coin for supplies.
To get a new engine you must find the parts, one is found in the shipwreck on the north coast, one is found in the shack in the northeast woods, and one is found in the alley behind the tavern, where the entrance to the cellar is. After you collect these three they will be turned into an engine.
After all these three conditions are met, return to your ship to set sail.