Now head back to the right, across the bridge, and go a little south. Head up toward the large tree in the middle. Hollow out the center of it to obtain two frame repair Z's. Now head down and around, going through the hole you came from. Run back behind the waterfall and across the bridge, then head to the east and under the bridge. Head to the table and you'll be prompted to place a S. carrot juice on the table. Do so, and you'll start a cutscene.
After the cutscene, hide behind the tree and wait for the bunny to circle the table three times. On the third time around, start running toward the table when the bunny is on the opposite side. Continue to run toward its house and it shouldn't even spot you. Once inside, it'll allow you access to a treasure chest inside. Open it to acquire decoder 3. Now head back under the bridge and go up to encounter the Gnosis hopping around. Continue up, then to the right, behind the bunny's house to go to the next area and initiate a cutscene. If you want to obtain PM card A, go through the purple portal and head all the way back to where Shion started from. Have Jr. as the main character and enter the dome to the south in order to get it.
Otherwise, head to the right, over the bridge, and south along the church's side. Enter the church to initiate another cutscene. Once inside, talk to the woman by the door at the back of the church to restore your party's HP and EP, then head down and save. Now head through the door in the back to initiate a cutscene and a boss fight.
Tiamat starts the battle by attacking one of your party members. You should have three people who have AGWS units. On everyone's first turn, load them into their AGWS units, then select Guard on their next turn. Everyone should use W-ACT on their next turn. Tiamat's attacks shouldn't be too devastating, so don't worry about them too much. Plus, the battle will be over before the AGWS units' FHP reach 0. When Tiamat has around 500 HP left, have Shion get out of her AGWS and use her most powerful tech attack on her next turn. He'll heal himself for 1,500 HP, so place Shion back in her AGWS. Wear Tiamat down by 1,000 HP, then remove Jr. from his AGWS. Use his most powerful tech attack on Tiamat to kill it for good. Hopefully it'll be on a special points up event slot.
Once you've finished Tiamat off, a long series of cutscenes will occur to bring you into the next area.