CONTAINS SPOILERS

Jefferson's clue "I heard there was a hollowed-out wall in a keyhole shaped alcove inside Castle Lockstone..." refers to a secret wall in the castle. Find the room (see image) with a floating Hook Shot pole with two keyhole shapes in the wall, one that is hollow. Aim your Hook Shot into the keyhole and make your way across. Pull the lever to open the gate to the south which leads to the secret.