If you've visited all the locations in the sewer then the chud king should contact you about your help. A new icon should appear in the upgrade tree to allow you to start upgrading the sewers.
I am also stuck in the same location. I have the shovel, I cleaned the debris in front of the doors, I spoke with the chud king about upgrading things, Ive been in the tentacle/mold room now I cant get back in. I cant find yeast anywhere and it wont let me buy the upgrades from the tree because "The sewers are outside IO's protection.....trying to get handsy." Any ideas on where to go next?