The secret exit is in the Ghost House. Go through most of the level, until you're on your way to the normal exit, in the room that's almost completely made of false wall (star coin #3 is around here). Go to the middle-ish area of the room, where there's a Boo near a sign post. You may notice some coins up in the air above you. The path to the secret exit is slightly in the air and to the left. Some crafty wall jumping or perhaps a Squirrel suit should help you reach the spot. Feel around a bit and you'll find the secret door up there. It'll lead you to a room with a ton of coins and a red pipe that takes you to the secret flagpole.