You are so close ... Mim is the right dwarf. And you have the right nasal. But the nasal consonant appears twice. 'Different nasal' meant change to
usage of a different nasal. In other words, use that different nasal in all/both instances.
RISE is almost the answer, but what do we hope our bread will BE DOING? Make that adjustment and you'll be ordering a cereal to wax lyrical.
The two that you guessed first - SHINY and NOSE - are actually the most difficult, theme and password-wise, because they are 'joking' fulfilments of it.
And together, they *sort* of almost hint at the theme in a way I didn't think of when I chose them.