you need to have repaired the forge it the llama temple on the third island.

when your sim does this the picture should shake, telling you that a fourth island has appeared.

go to the second beach on the first island and swim in the sea to the left (as you look at the sea)

if you swim far enough text should come up saying 'crystal island', keep swimming on.

you will see the loading screen and then get onto the fourth island.