Storage Room (Boilerworks)
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The red gem can be found on the left side of the bottom level that Luigi cannot reach. Gooigi has to go through a pipe on the left after moving a yellow cleaning cart out of the way (the pipe on the right leads to nothing). After that, he needs to go through another pipe, then grab the gem after Luigi turns the valve to divert the water in Gooigi's path.
When Luigi returns to the Storage Room again, Toad can be found hiding in a crate after Gooigi uses the Burst function next to that crate.