According to the 1st Podcast, the hostel's shuttle bus stopped at the Tourist Information Centre at Jonson Str.
That is where Theo and the other youngsters stepped out.
From there it's a 5 minute walk to CM, due South. They did not step out of the bus in front of CM.
Location of the Info. Centre:
Contact Us - Byron Bay Visitor Information Centre
I still believe that Theo knew how to walk back to his hostel, and that he would have had to follow Jonson Str. Northbound, in the direction of the Info. Centre and beyond.
Instead of turning South and East.