After you agree with the mayor in the top floor of the southeast tree in Kolima Village to solve the problem with the Dream Tree, a cutscene inside the Dream Tree's basement leads you to the Phantasmal Bog, and you land on a circle of light. Stepping off and standing back on this circle will give you the opportunity to go back out of the Bog. A shadowy creature watches you from the water, and when you start hopping across the counterclockwise linear path through the watery room, it uses the Crush Psynergy to destroy the platforms behind you. The path leads you down the southwest of the two exits down, and an earth pillar you push into the water to reach the southwest exit will also let you access the circle of light easily.
As you proceed south, you are linearly forced through quite a few rooms until you reach the right end of a large room with a lake with hoppable platforms and logs in the water. Hop northwest to get to another, larger watery room, where you can hop to and reach a giant Dream Leaf in the center, which has a puddle of water in it. If you cast the Cold SnapPsynergy on it, you create a massive ice pillar that causes all of the water in the dungeon to freeze; however, this does nothing for you, and you are actually supposed to cast Arid Heat to remove the puddle from the leaf. (If you freeze it, cast Fireball to return the ice pillar into a puddle, and then cast Arid Heat). Removing the puddle with Arid Heat removes all water from the dungeon. The chest to the left of the site of the giant dream leaf can now be accessed, so before you go back down through the bottom doorway, climb down the stairwell at the right edge of the room and claim a Mint from the chest.
Return down to the large room south of the room with the giant dream leaf, and go just behind the top part of the upper vertical log so that you can roll the lower right vertical log left. Then roll the upper left horizontal log down. Now return to the giant dream leaf and cast the Douse Psynergy to fill a puddle in it, filling the dungeon with water again; now go back down and hop the newly constructed path to the chest at the northwest corner of the room, which contains the Faery Vest. Go back to the leaf and Arid Heat the puddle, then go back down to the logs, and roll the lower left vertical log right, the left horizontal log down, and then the lower-right vertical log back left. Create a puddle in the Dream Leaf with Douse again, and now you have a path that leads you to the southern exit of the log room. Take it and follow the linear trail northwest, up the stairs into Phantasmal Bog 2F.
In a smaller, purplish room with logs, puddles, and a Mars Djinni, Cold Snap the bottom puddle, then position yourself left of the vertical log to the left and roll it right against the pillar. Roll the upper horizontal log down, and then Cold Snap the upper puddle, which elevates the log and lets you walk across it to the Mars Djinni. Fight and defeat it to earn Glare. Take the northeast entrance into a room with many large black abysses; push the elevated earth pillar two spaces right into an abyss, and then slide down the cliff slide to the left to fall back into the room with the giant Dream Leaf. This time, cast Cold Snap on the puddle in the leaf to turn the waters of the room into ice. Step off the stairs and slide right, down, left, up, and left to access the northwest entrance. The long, slanted, icy room that follows forces you to the entrance at the far left end.
You end up at a large, lone room with a sliding puzzle that has a chest at the center of the frozen lake. Step off the stairwell at the center left end of the room and slide right, up, left, up, right, down, and right to reach the stairs on the center right of the lake. Walk up counterclockwise to the stairs at the top end of the lake and slide down, right, and up to reach the chest, which contains the Giant Axe. Once again slide right, up, left, up, right, down, and right to reach the stairs on the center right of the lake, and go down the southeast exit. Follow the path to an earth pillar and push it down four tiles, and use it to go up the stairs at the east end of the room.
You are now back in the room with the many abysses. Follow the narrow trail southeast so that you can cast Grip on the Grip spire near the center of the room, just below the top tip of the mass of ice. Once below the flashing ice, cast Fireball on it to turn the contents of the giant dream leaf in the floor below back into a puddle, changing the room's color. Cast Grip on the grip spire behind where the ice once was, and you are led back down to the first floor, where pushing the earth pillar one space left into the water lets you access the doorway immediately behind it. For the rest of the way, back in the watery room you began the dungeon in, follow the linear path counterclockwise, and near the top, a cutscene leading you to the Sludge boss battle automatically ensues. Defeating it automatically returns you to Kolima Forest, with you now having access to the Crush Tusk, which grants Tyrell the Crush Psynergy when equipped.
While the party remains in the Morgal region of the world, it is possible to return to the Phantasmal Bog dungeon by using a Dream Leaf at Kolima Village's inn. This allows the Mars Djinni Glare and the items in the dungeon, if any of them were missed, to be accessed up until the party in Belinsk Ruins goes through the final gate. Following this, Kolima Village cannot be reached other than with a hacking device or the Endless Wall glitch.
The nature of the Phantasmal Bog is unclear. It is a complicated maze, featuring multicolored flora and a large dream leaf at its center. It is unclear if the Phantasmal Bog is a real place or simply a dream world: it can only be visited via the use of Dream Leaf, and yet events that take place in the Phantasmal Bog seemingly have an effect on the "real" world.
The Phantasmal Bog presumably came about as a result of the Golden Sun event, when Kolima Village and Kolima Forest were mysteriously moved to the east. The two areas landed on marshland located in the northeast corner of the country of Morgal. The move effectively destroyed the marshland and many of its native inhabitants, and the area became fertile ground. The destruction angered one of the marsh's former inhabitants, Sludge, who came to haunt the area and placed a curse on both Kolima Village and Kolima Forest. The curse rendered Kolima Forest unnavigable, and caused one of Kolima's four great trees, the Dream Tree, to sicken.
The Dream Tree was the source of Dream Leaves, which normally caused people to have good dreams. When the Dream becomes ill, people begin to have nightmares. To find the source of the Dream Tree's illness, Matthew and his friends use Dream Leaves at the base of the Dream Tree, and soon find themselves in the Phantasmal Bog. The explore the Bog, sighting Sludge along the way, and when they come to the end, the Adepts remark on the mysterious Bog and its resident "lizard monster." Sludge then makes an appearance, and attacks the party. After a fierce battle, Matthew's party defeats Sludge, ending the curse. The Adepts then awaken in the Dream Tree, and are somewhat confused as to the nature of their recent adventure. It was supposedly a dream, yet the Adepts gain the Crush Tusk, a relic of Sludge that held Sludge's power. They find that the curse on Dream Tree was lifted; Matthew is then able to use Hermes' Water to heal the Dream Tree.
- Mint: In a chest next to the giant Dream Leaf.
- Faery Vest: In a chest in the area under the giant Dream Leaf with the move-able logs.
- Giant Axe: In a chest in the sliding puzzle room.
- Crush Tusk: After beating Sludge.