Here's what you were meant to do instead of Frankensteining together a fake human: You need to walk into the store knowing what names to give to the guy behind the counter. So ... do you go try to find that guy's diary? Talk to his therapist? Nope -- you find them by pulling a manhole cover off a sewer line and reading the love note carved into it. If you use those names to fill in the blanks in the butt store owner's tale, he gives you ... a pile of prosthetic skin. Skin. The entire puzzle is like something you'd scream in disbelief as your last words.
Guybrush's inventory is what police refer to as "probable cause."
Once you have the skin, you stretch it out across the open manhole cover. This will signal other serial killers that you've claimed the sewers as your own, but it also creates a trampoline allowing you to access the bank.
"I FLY ON THE SKIN OF MAN! THROUGH THIS FLESH I AM MADE FREE!"
So, to summarize: Read a declaration of love on the bottom of a manhole cover, use those names in a game of Mad Libs with a foot salesman, take a wad of skin as your reward, and use it to build a trampoline. Every time someone reads the solution to this puzzle, Xiuclueesk, the ancient god of madness, grows stronger. At 2 million hits, we summon him. Let's do it, gang!