1) Go to Windfall Island and throw the pigs into the water.
2) While they are still in the water talk to the man near the Bomb shop and choose to play his game for 3 Skull necklaces.
3) Once the game starts go and find the pigs.
They will be swimming around on land, the pig up near the jail entrance will even make ripples. If you push any of them off the edge of something they will slowly spiral down to the ground below. Picking them up will return them to normal.