From Bulbapedia, the community-driven Pokémon encyclopedia.
Fogbound Lake is a lake situated high above Foggy Forest and accessed after going through Steam Cave. It can be seen after the battle with the Groudon illusion created by Uxie. One Time Gear is placed in the center of the lake with Uxie guarding over it. Fogbound Lake is located on top of a pillar with waterfalls flowing over the edges into lakes underneath. It is filled with many Illumise and Volbeat, which glow at night, which creates an amazing sight. Fogbound Lake is usually hidden by fog, hence the name, although the fog will go away if the Drought Stone is placed into the "heart" of a statue of Groudon near the front of Steam Cave.
Prior to the Guild's expedition, Uxie had protected the location of the lake by erasing the memories of explorers who had defeated the Groudon illusion and still dared trespass. During the Guild's expedition, the player and their partner found the Groudon statue. Due to a feeling that player had had many times before, the player and their partner found out that the stone that their partner had picked up just before going through Foggy Forest, known as the Drought Stone, was needed in order to lift the fog. Corphish is also there with them at this time, and goes to tell the others about their discovery.
They try to go to Fogbound Lake, hoping to find out if Uxie has erased the player's memory and turn them into a Pokémon. This was due to the player having a sensation that they have been here before. They manage to go through Steam Cave, and feel something. Around this time, Corphish takes the rest of the group to the statue, finding out that the player's team has gone on. They then feel the ground shake and go through Steam Cave. Around that area, Team Skull is lying on the ground, aching from Wigglytuff's defense against their attack.
Unfortunately for the player and their partner, they have to face Groudon. They defeat the Groudon and find out that it is an illusion created by Uxie. They also find out that Uxie couldn't erase the most of the player's memory, only the part of it about Fogbound Lake. Uxie almost erased their memory of the Time Gear in Fogbound Lake until Wigglytuff and the rest of the Guild appear and persuade Uxie to not erase their memory if they promise not to tell anyone. However, a thief managed to make it to Fogbound Lake and steal the Time Gear, even though the Guild had kept their promise.