It's definitely 'drink liquid here' and if memory serves, will lead to the character shrinking... There is a breakable translation formula but I'm buggered if I can remember what it was about. The same code gets used later in the game (I think!).
James Groom posted a solution for KW1 which I think was also published in an OUM.
- - -
ETA: sorry, I think my memory is letting me down. KW1 solution was published in OUM 55 but I think you are playing KW2, correct? Can we clarify that first?

- - -
ETA2: I just re-read the 'instruction' sheet for KW2 (kindly scanned by Steve M). More typos than you'd expect to see in a five year old's homework. Enormously embarrassing.