Mike Mulvihills unreleased novel was going to reference this. Basically the Lake was one potential entry point for the Horrors (like Mt. Haleakala) and all the weirdness there were the Immortal Elves doing their damnedest to stabilize that particular confluence. It's why Wraiths were around the area, and it's why the game stats for the Lake changed quite a bit over time. Then again, this was such "deep background" that I have absolutely no idea what the current design intent is. All the story threads that relate to it have been pretty much dead since 2062.