Shaky Claim was founded a hundred years before the events of the first Psychonauts game. The soil on which the town was built was unusually high in Psitanium, and ill effects soon started appearing. After multiple cases of so-called "Paranormal Hysteria" the Thorney Towers Home for the Disturbed was built to host those infected. This failed, as the effects spread to the majority of the population, and the area was evacuated. The valley was then flooded, creating Lake Oblongata. Shaky Claim now lies in ruin at the bottom of the lake and has become the Lair of the Lungfish.
- The town's history can be found on the cut-down tree in the middle of the parking lot.
- At the beach, if you stand around listening to Elton communicating with the lake's fish, the town eventually comes up. Elton reacts to this with confusion, as he doesn't know of any ghost towns nearby.
- Under the lake while battling Linda, you can see the Shaky Claim Nail Factory, hence all the boxes of nails everywhere.