How to RescueEdit
After entering the warehouse near the exit, switch to Bungalow and leap over the boxes into the next room. When the steamroller approaches, leap onto the boxes, onto the steamroller and wait for it to exit. It will eventually roll into the mud. From here, use the steamroller as a stepping stone to reach the other side. At the end, it will raise up enough for you to leap onto the grass at the end. Move around the grass and Madge will be waiting for her father at the end.
It is possible to reach Madge without having to go through the mud, but this can only be done before the steamroller gets into the mud. If you can jump off of it at the right position and timing, you can reach Madge so you do not have to go through the mud.