I was born in 1991 and my sister, who was born in 1988, remembers this book too, but neither of us can remember the title or what year it was published.
All we can remember is that a little kid can see the moon out their window at night while laying in bed. One night the moon is gone, so the kid goes looking for it. They find the moon in their backyard all deflated and crumpled up and dirty. They wash the moon off and inflate it again and send it back up to the sky. I recall a page where the kid is talking to their neighbor along a fence while their neighbor is on a ladder and trims or waters their hedges.