Fron the top of my head (could have some flaws):
To create the "rope" use a sprite, make an extra imagepoint on the left and one on the right.
Set the "rope" position to x=lerp(balloon.x,object.x,0.5) y=lerp(ballon.y,object.y,0.5)
Set it's width to distance(balloon.x,balloon.y,object.x,object.y) and it's height to what's desired.
on mouse released:
Pin the balloon to "rope" imagepoint(2)
pin the object to "rope"imagepoint (1)
(choose only position for the pinning, and probably rope style.)
this way you don't need physics
The same can be done with physics, but then you should abandon bullet behaviour and use physics for everything.