First, You need to have Gramps’ pipe to get into this island. I will cover for the pipe guide.
For the pipe, your gramp will give you at the beginning of the game. On the game, you will sell it later to Sparrow Feather Merchant for 5000 Gald. You can buy the pipe back from the old man at Lastonbell (Visit THIS PAGE for more info about it).
Go back to your gramps when you’re able to re-visit Elysia. Give the pipe to him and you will get an Elixir as reward (this elixir reward has an expiry time, you need to clear this before finishing the iris gems episode). This conclude the pipe’s quest for a while.
Second, you need to buy all map from the turtlez. He’s on every town located on this game (Last town is Lohgrin) and marked with “!” on the town map. After buying all maps from him, he will show up on Great Camelot Bridge. Talk to him and he will say something about Katz Korner.
Note: If he’s not appear on the bridge then you may haven’t bought all the maps from him. You may also need to progress until you reach Artorius Throne.
Now go to Ladylake – Noble District. You should see “!” on the map. Go there to trigger an event. After the event the Katz will allow you to enter Katz Korner if you have a certain item.
Note: if you don’t see the Katz on Noble District, then you may need to talk to lord of the land first (Morgrim at Pendrago).
Now go back to Elysia and go to Gramps’ house, check the bookshelves to find the pipe and letter. You will get Gramps’ pipe, go back to Katz and he will allow you to get into Katz Korner.
Note: If you don’t return the pipe on the firsthand, then I believe you don’t need to re-check the house :). The only thing you miss is an Elixir.
You can find an optional boss Dark Turtlez here. You can also find one discovery point.
It’s located at the northeast of the inn.