Lysander's Secret is a small location discovered by the heroes in Shadow of Israphel part 10. It is spotted by Xephos, when he, Knight Peculier and Honeydew come out of an abandoned mineshaft. They see that Mistral City has been burnt down, so they go and investigate, checking to see if anyone is around, discovering that most have fled to Icaria. Knight Peculier says to go and check Lysander's house to see if he's there, but he is not. They go upstairs to look for him, then Xephos travels downstairs and finds a hole where Lysander's rug used to be. He calls Honeydew and Knight Peculier down so they can see it. It was a small dirt hole leading to a room with netherrack walls and floor, a pumpkin lantern, and a chest with a sign above that said: "Dark Master I worship your unholy power - Lysander." In the chest there was enough obsidian to make a Hellgate as well as a glowstone block in the middle and some sugar.
This led to the belief that Lysander burned down Mistral City. However he was exonerated when our heroes found out (in "Shadow of Israphel" Part 24: The Fiend) that Jock Fireblast was the one who burned the city down.