I remember when the royal architects came to build a shrine in that grotto to the north. They wanted to hide something there. I asked one of them what they wanted to hide, and he just looked at me, his eyes solemn, full of dispair. [sic] He opened his mouth, about to tell a lie, or something vague, but stopped and looked away.
A while later, I was tending to the crops and he came back. "They're in the grotto now. I wanted to show you something." He reached into his bag and took out an old cloth. He came close to me, turned his back to the village and pulled back a corner of it. Very quickly, then covered the thing back up. All I saw was blue crystal and the Triforce. He left and never explained what it was.
Every so often I thought about what they were hiding. When the dark army came, they asked if we were hiding anything. We all said we weren't. I was not lying. And they would have known. They had the Mask of Truth. I guess if they could read minds with that thing, all they would have seen was the Triforce. They left, but not without destroying a house in anger. Why didn't they look in the grotto? Did they? How did the architects hide that thing so well that the army that killed our kingdom never found it? Maybe that thing was so powerful it could do worse than kill us.
I still think about the thing in the grotto. And I think I know what it was. We've all heard stories about the Hero, how he traveled through time to save us. He couldn't just do that, though, he had the Ocarina. The Ocarina was an heirloom of the royal family, and they couldn't very well hide it in the castle, not with the dark army taking over. Where better to hide it than in a forgotten village under a volcano? And I think they must have been desperate, too, because I've heard rumors of what they were doing to prepare for the Hero's "inevitable" return. The armor, the swords from Termina...
The Ocarina must have been turned into a tool of war.
The journal provides an explanation for the nature of Kinolangdanzel Shrine and the presence of the Ocarina of Time there. The author of the journal guesses that the Ocarina was used as a tool of war, not realizing that the Songs were changed, rather than the Ocarina itself.
The journal mentions that the Dark Army was in possession of the Mask of Truth. This contradicts The Eruption of Death Mountain which states that Kakariko Village had retained the Mask. The author also mentions that the Mask of Truth can be used to read minds, which is untrue: only animals' minds can be read using the Mask of Truth. Given that the journal was written by a farmer not associated directly with the war, it is possible that he or she was misinformed and repeating rumors and hearsay. This also implies that not even the villagers of Kakariko knew where the Mask of Truth was.
Background and Inspiration Edit
The third journal, or "farmer's journal" was included in version 3.0 of Relics of Hyrule, with Kinolangdanzel and the Freezing Caves. It was included to enrich the atmosphere and lore of the mod, and to provide background for the Ocarina of Time, which was included in the same update.