The great nautilus when it was defeated, fell into a deep lake. Eternally bleeding from its ink sac, the lake is permanently polluted with its magic ink. The creatures that once lived nearby have been permanently mutated and now roam the world at large.
The nearby town has received considerable wealth from the lake of black sludge, forming a sort of "gold rush" type of town. They harvest it and either resell it, or create casting scrolls.