I know what you mean. This bit really p*ssed me off too. I almost kicked my Wii out of the frigging window in a big sulk.
The way I eventually did it was to shoot the bird dropping the bomb with the arrow (a nightmare cos you cannot Z-target arrows). Eventually the Wagon carried on to the next bit.
At the same time, you also have to keep the tw@ts on "horse"back at bay.
After I managed to complete this bit, my missus told me she just used the boomerang to stun the bird before it drops the bomb (easy, cos you can z-target with the boomerang). Piece of cake she said.