Fire the first Yellow bird into the middle of the first stalactite, causing it to fall straight down. The collateral damage causes the left tower to fall. Fire the next Yellow bird through the both stalactites and the rope holding the boulders. All that remains is hitting the TNT in the middle with the Yellow bird. Either a direct shot or a lob shot should work.
This level was supposed to have Corporal Pig in it, but has King Pig in it instead. The cutscene even shows Corporal Pig defeated, but King Pig really took his place.