Create another new layer and with the same chalk brush paint a thin white line on the upper margins of the hole (the specular highlights).
Lower the opacity of the chalk brush to 40% and paint with white in the area indicated below to give our hole a basic shading.
Open the "Dirt" texture, select all and copy/paste in our scene (and don’t forget to convert it to a smart object). Use the Free Transform Tool (T) to place the dirt as shown below.
Add a layer mask to the texture layer (Layer > Layer Mask > Hide All) and use a white chalk brush to paint over the whole in the layer mask to reveal the texture .
Change the blending mode of the dirt texture to Multiply to add some texture and realism to our hole in the ground.
Open the file "Island", select all and copy/paste in our scene. Add a layer mask to the island and paint with black in the layer mask to hide the lower part as shown below. Use the Free Transform Tool to make the island seem like it’s coming from the hole.
Create a new layer and clip it to the island layer. Change the blending mode to Luminosity and paint with a black brush at 40% opacity over the area shown below.
Create another layer and also clip it to the island layer. Change the blending mode to Overlay. Let’s paint some basic shading on the rim of the island. Paint with white on the left side and black and the right side with a brush at 20% Opacity.
Open the "Grass" file again and copy paste in our document. Position this layer so that the grass will be positioned on the surface of the island. Add a layer mask and use black to hide everything except the grass that will cover the island.
Create a Hue/Saturation Adjustment Layer and use the settings shown below to increase the green hue. Clip this layer to the grass layer that is covering the island surface.
Create a new layer and use the chalk brush to paint some hard shadows just beneath the grass as shown below.
Let’s make a hole in our floating island. Create a new layer and paint a black semicircle as shown below.
On a new layer paint some thin white lines on the hole margins. Group the two layers (shift-click on both and click Ctrl +G) and name the layer "Hole".
Duplicate the hole group (Ctrl +J) and move the new hole on the ground.
Open the file "Meerkat" and use the Pen Tool to make a path around the meerkat. Press Ctrl + Enter to transform the path into a selection. Copy and paste the meerkat in our scene and place him as shown below.
Add a layer mask to the meerkat layer and hide most of his body (by painting with black in the layer mask over the areas you want hidden) as shown below to give the illusion that he is inside the hole.
Make a new layer and paint some subtle shadow (with the round soft brush tool) on the grass where the meerkat is.
Open the file "Stairs". Make a selection of the stairs with the Pen Tool and copy/paste the stairs in our scene. Place the stair as shown below.