Continue on the story path, across the wooden path. You get to a big area with lots of colour blocks and buttons. Further up, cross the bridge to the right, push the green button and take the blue cannon to do the timed blue coins collection.
Go back with the blue cannon. Then find and push the buttons in this order: Blue - Yellow - Red. Now you can make the red ring challenge in the same area where the blue cannon was. Get the chest by going through the pipe in the top right of the area.