Here's some stories of Lost Lake I found on the net:
One witness and their sister in-law were fishing late one evening alone at one of the day beach areas. The witness reported that as they were shining their flashlight on an island across the water, they saw a dark figure moving in the brush. At first they figured it was a coyote or something, but then realized it was too big to be an animal. Just as they were about to turn off their flashlight, the light hit the figure. It appeared to be a young Asian boy, perhaps four feet tall, pale, and only wearing swim trunks. Right as the flashlight was turned off, the person heard a large splash like something heavy was thrown into the water. The witness claims it couldn't have been a fish as whatever it was made a loud splash. They then turned the flashlight back on and searched the area for the little boy, but found nothing. Spooked by this incident, both parties left in a hurry and have never gone back.
The second incident comes from the same two people mentioned before, but this time at a different location in the park. Once again they were fishing late one night, this time off of the broken bridge. Both were talking as their poles were in the water when they looked down towards the water and noticed a large figure in the water swimming to shore. When it reached land, it beached itself and stayed motionless for several minutes. What happened next terrified the two witnesses. Whatever it was, it then stood up on two legs and began to walk around as if it was searching for something. They estimated it was about five feet tall, but couldn't really make out any features as it was so dark. The creature then crouched down on all fours, layed on it's belly and then slithered back into the water and disappeared. Both witnesses were terrified and needless to say, got the hell out of there.
So here we have two seperate types of incidents at the same (generally) location and by the same witnesses. Two possibilities here. One is that whoever told the story is fabricating it, but given the ghost sighting and the stories I've heard about Lost Lake I'm not sure. There's been stories of a young hmong boy hanging himself from one of the trees there as well as several other suicides. Could the ghost they saw have been the same little boy that hung himself?