Bloody hell, a member from '06. Welcome back.
IIRC you shouldn't need t' deal with the smog your first trip through. It shouldn't be there the first time you enter the area to save that kid (and monkey) who got themselves captured by Bokoblins. If the smog is there, I reckon you've already done that, and are at this point in the game.
And no, the part where that monkey ya saved nabs your lantern is later in the game. Assuming my above assumption ain't wrong.