The rewards for completing this side quest include a 
Three Stars and a 
Luck-J Scroll, which are really nothing special, so its at this point that you have to decide whether you really want to complete this lengthy side quest for such a lackluster reward. The only real reason to complete it are for the trophies in the PlayStation 4 and Steam versions of the game. The choice is yours.
Make sure to use Diablos’ 
Enc-None (which becomes available after it learns Enc-Half) while completing this side quest. Having it equipped will not interfere with your ability to engage in the required encounters listed below.
Make your way over to the town of Timber. To north of Timber is a large lake, called Obel Lake, and there is a peninsula jutting out across it. Walk out on to the peninsula and press the 
Button until a window pops up that says:
This must be Obel Lake:
Choose the “try humming” option and continue to choose that option until a shadow approaches and speaks to you. Keep speaking to it until it tells you about his friend (“It’s my friend, Mr. Monkey… Can you find him for me?”). If you continue to talk to the shadow it will offer more hints as to where you can find Mr. Monkey.
Before you leave, press X while on the peninsula and this time choose to throw a rock. Keep throwing rocks until you receive the message “The rock skipped many many times.” Once you receive this message you can head over to find Mr. Monkey.
Mr. Monkey can be found in the forest west of Dollet. When you find the Monkey you will be given two options; you can either throw a rock at the monkey or sing to it. Choose to throw a rock.
It may take a try or two, but if the last rock you threw at Obel Lake “skipped many many times” the monkey should eventually throw a rock back at you with a bunch of letters on it (U R H A E O).
Head back to Obel Lake and speak with the black shadow to start receiving clues as to where the each of the other rocks are located. The black shadow will provide you with one of the clues below, and you will eventually have to travel to each.
In each of the areas mentioned below just keep pressing Button until you find the rock. Each time you find the rock make your way back to the black shadow at Obel Lake to receive your next clue.
Here are the clues you will receive:
“You’ll find something on an island east of Timber, too.”
The island you are looking for is located east of Timber (obviously). There are two islands in that area; a larger island with a beach to the south and a smaller island with no beaches to the north. The rock is found on the small island to the north. (R E A I D R)
“There’s also something on top of a mountain with a lake and a cavern.”
Hop into the Ragnarok and fly over timber. Trace the train tracks heading west out the city along until they cross a river that leads to a waterfall to the north coming out of the mountain. Land on this mountain and wander around this mountain pressing X until you see the message “A bird is warming an egg.” Choose to “Check it out” and you will be thrown into battle against two Thrustaevis’. After the battle you will receive one of the rocks. (E A S N P D)
“At the beach in Balamb, something special washes ashore at times.”
Fly over to Balamb and wander around the only beach that the tiny island has. You may find plenty of fake rocks during this portion of the search, but just keep looking. (S T S L R M)
Note: If you see any other clues you should ignore them and speak to the shadow again. The other clues lead to (useless) Draw Points for magic.
Go back to Obel Lake once you have all four rocks. The game does not give much away in terms of clues for solving this puzzle, but essentially you can read it from the top right letter first and going down it reads “MORDRED PLAINS HAS TREASURE”.
Fly over to Mordred Plains which is an area located to the north of Esthar city. It is enclosed by a mountain range to the north and to the south, so it is only accessible by flying in.
As you wander through this area you will find all kinds of rocks. Ignore all of the rocks except for the “red-faced” rocks that will tell you the exact opposite direction that you should go. So, for example, if you an encounter a “red-faced” rock that says:
“The red-faced rock tells you angrily “The treasure’s to the north!”
Then you should head south!
You can also keep talking to the red rocks as they may be able to tell you two directions that you should head at once.
Keep wandering around until you encounter a “red-faced” rock that says “The treasure’s not here!” and you are done. Once you have obtained the Three Stars the quest is completed.
There is one other prize that you can obtain and that you need to pick up in order to get the trophy available for this quest. There's an island between Centra and Esthar where you can find a Luck-J Scroll. Use the screenshots below to help you find it:
Obel Lake Secret
You will receive the Obel Lake Secret Achievement/Trophy once you pick up both the Three Stars and Luck-J Scroll rewards.
And that’s it for the Obel Lake side quest! Use the link below to take you back to the Ragnarok Final Preparations page if that’s where you were at in the strategy guide:
