The Balloon Painting is an item sold by Wolfie in Quest for Glory V: Dragon Fire. It is sold for 100 drachma and is available upon first meeting him.
If asked, Wolfie will talk about the painting and will tell him he had seen someone make this balloon ages ago.
The Balloon Painting is needed to make the balloon needed to get to Delos and complete the Rites of Rulership. While the painting isn't used in the construction, it is needed to be shown to Marrak to buy the brazier needed to create the warm air, and to be shown to Ann Agrama so she can sew a spare inn sheet into the balloon.
Telling Wolfie about the balloon is needed to complete a Deed. Telling Ann that Wolfie painted the balloon painting after showing it to her will get her to contract Wolfie to paint the interior of her inn.