There is no cow level!

No, really, there is no cow level.  Wanna know how to get to the new "Cow Level"?  Then follow these simple steps to make your key to Whimsyshire and, soon, you'll be on your way to riches and fame.  NOTICE:  Some steps take a really really long time!

Items required for Staff of Herding:

• Black Mushroom
• Leoric's Shinbone
• Liquid Rainbow
• Gibbering Gemstone
• Wirt's Bell
• Plans: Staff of Herding

The Black Mushroom can be found in Act 1 - Cathedral

Leoric's Shinbone can be found in Act 1 - Leoric's Manor, in the fire place.

 

Liquid Rainbow can be found in Act 2 - Dhalgur Oasis.  Talk to the Alchemist on the southern part of the map.  He will open a pathway to a cave where you will find a mysterious chest.  Inside the chest is the Liquid Rainbow.

Gibbering Gemstone can be found in Act 3 - The Caverns of Frost Level 2.  You can enter this cave from the Fields of Slaughter. (Not the Caves of Ice) Find the Epic mop named Chiltara and slay him.  I would start on the Heart of Sin quest and then use the waypoint to go to The Bridge of Korsikk.  The caves are very easy to find.  They entrance lays in a circle about one full screen from the edge of the map.  You can also use the Destroyer locations on your map to narrow down the search area.

Wirt's Bell can be bought at any time in Act 2, from Squirt the Pedler, for 100,000 gold.

Plans: Staff of Herding are dropped by Izual in Act 4.

Next, talk to your Blacksmith and then right click on the plans to teach him how to make the staff.
You will need 50,000 gold and the above items to craft the staff.

Now go talk to the Cow King, west of Old Tristram Road.  Whimsyshire will now be unlocked!