The Castle of the Damned is demonic stronghold used as the location to retrieve Morgan Le Fay.
What was once a natural forest somewhere near Camelot fell prey to a metaphysical transformation and became a demonic stronghold. The Flame Dragon Ghosts corralled the citizens of Camelot to the Castle of the Damned, where they were forced to work on a Munchausen's Wheel.
Upon analysis of a sample of tree bark taken from the Castle, Ray learned he could readjust his steam-powered Proton Pack to disrupt the cohesion between the local fauna and magical elements and create an alternate point of entry and exit. Peter Venkman offered another plan: they flew Ecto-1 right inside. Once Morgan Le Fay was destroyed, the Castle of the Damned dispersed.