Eureka! We're in the engine room! My analysis tells me that if you trace the spinning crankshaft all the way back to its source, you'll find Raleigh's treasure key, and sabotage his machine while you're at it.
Upon entering the room, Sly came across an open furnace door that was shooting out flames in his path. After slamming it shut with his cane, he pressed further and Bentley pointed out to him that he was in the engine room, and according to his sources, if Sly could trace the spinning crankshaft back to its source, he would find Raleigh's treasure key and sabotage his machine in the process.
Sly ventured through the engine room, full of dangerous machines, furnaces and walrus guards. He eventually came across a giant spinning furnace. As fast as the furnace was spinning, Sly had to take an alternate route to find a way to stop its rotation. With some skillful climbing, Sly grabbed onto a hook to a mechanism that slid over to the furnace, destroying several pipes in its path, and stopping the spinning furnace in just the proper spot. Sly passed through the furnace-filled path and leaped onto the spinning crankshaft to grab the treasure key.
I can't believe I pieced this one together. Try 2-2-7.