The Council will tell you when it's time to look in the Bat Hole. But even at this point it will be hard.

In order to advance into Guano Junction, you'll need something to protect you from the stench. If you fight in the entryway for a while, you'll gain a Pine-Fresh Air Freshener.

Now you can advance into Guano Junction. In Guano Junction, you'll gain the means to open up the blocked chambers. Take the sonar-in-a-biscuit you get and use it not in battle. This will open up a blocked chamber.

The Boss Bat will be lurking behind the third one. When you defeat him and return to the Council, they will give you a Batskin Belt.