"In the tallest tower. That's where the Butcher's Lair is."
Ganondorf used a room in the tallest of the Ivory Towers to hide Ness and Lucas when he realized that they were dangerous to him as they were to his enemies. He also used this room to store "trophies", the disemboweled corpses of the Butchers' victims sewn back together, as appeasement to the Demons, who were very furious with their "abandonment" by mankind.
The Butcher's Lair was destroyed by an explosion caused by Luigi, who was trying to stop the Butchers. It is unknown whether or not Ness and Lucas survived this explosion.
"The dark was absolute. It smelled of the night I lost Daisy. Then, it was all so clear."
Luigi's description of the Butchers' Lair
The Butchers' Lair is pitch black and very eerie. However, beyond the dark, the room was surprisingly clean despite the violent nature of its inhabitants. The walls were covered in pictures and paintings, and a few antiques as well. There was also a water fountain visible. Whether or not this was used to feed Ness and Lucas is unknown.
"In appeasement to the Demons. So furious with their abandonment."
The "trophies" placed there were often telekinetically moved around by Ness and Lucas for play, and they placed the corpse of Princess Peach on a golden throne to mock the authority she had in her life.