I'll be back...
 

...said Phoney Bone.
Instead, I'm waiting around for what seems like forever for Phoney to put pepper on the punchbag.
I tried a few different things, like seeing if having Gran'ma inside or outside the tavern affects it, but nothing is working.
Halp! :o

You've got to do it. ;)

Yeah, but he doesn't appear outside after I click the thing on the thing. :)
Edit: Nevermind, just restarted the game and it works now.

I think you have to pick up the pepper as Phoney, and then put it on the punching bag when Grandma isn't around.

Or am I misunderstanding your problem?

Edit: Good to hear. Sorry I wasn't much help.
(by the way, "You've got to do it. ;)" meant you have to be Phoney to do it, not that I was telling you to work it out yourself...!)