I've got the password "Goldeen Need Log" but wheres the other one on Island 5?
Go to the Dotted Hole.Use cut on the door.Then it is easy if you go to a braille decoder.When you go down you will see the sapphire.Some guy will come and take the sapphire.He wants to sell it to team rocket!Then he will tell you the last password.
Here's a quick runthrough:
http://www.youtube.com/watch?v=_fo1gpZRaAw