Lady of The Lake

The Lady of the Lake is a demigod/primordial spirit daughter of Akadi and Istishia. One day while riding the clouds of a storm over Intolerance, she felt a pull of a summoning and binding spell. Curious, she was drawn to the source, and flew down to Dark Academy, and to the campus lake where two students were casting this spell. It wasn't very powerful magic, she thought, but seemed to be directed to try to capture a powerful spirit. Amused, she dove into the lake, and felt immediately a stronger pull of magic from the two students. They had somehow enchanted the lake to be binding circle all on its own. It would take some effort to break the binding spell, but she didn't really have anywhere else to be, so she continued along with the binding, turning her own magics to probe the students attempting to bind her and draw them to learn more about them. The students, feeling a massive augmentation of magic, panicked, and tried to slam shut the binding spell, which did indeed bind the spirit to the lake, but also bound them to the lake and spirit as well. The spirit, determined to make a good showing of the student binding, drew upon herself pieces of the lake (, and accidentally the student themselves, who could tell the difference when you are a formless spirit), to make the creature which would become known as the Lady of the Lake.
Upon her creation and first appearance, she was disappointed to realize no one was there to greet her, as she had accidentally absorbed the only two possible witnesses. Still, if this were to become her home for a while, she decided to make the best of it, and begun to travel the surrounding area, learning all she could of the area. She enjoyed the vast natural wonders of the area and found she could easily travel about 50 miles before the pull back to the lake became uncomfortably strong. Certainly, she could break the hold of the lake, but this was a new sensation for her, and she found the limitations intriguing, and desired to see what she could do under these conditions. She spread herself out so that a part of her was a part of all the surrounding nature, so she could better feel what happened around her, and what deserved her attention.
Most of the surrounding civilized areas were acceptable but for Intolerance docks/mill area, with its wanton destruction of the surrounding nature. She planned to destroy it at her next convenience, when she felt the call of the Lake, much stronger than normal.
She returned to find several powerful Wizards around the lake. Perhaps these were the one's meant to see her as the Lady of The Lake? She quick reconstituted her Lady form, rising out of the lake dramatically. The wizards seemed suitably impressed and respectful, and they conversed for many hours as they were eager to learn what had happened to the two students, and how she had arrived here. At the end they concluded that the students were exceedingly reckless, and their fate was a proper representation of that, but were concerned about a spirit as powerful as her staying here indefinitely.
After much negotiation and pleading by the wizards, she agreed to limit her influence and domain to the surrounding nature, which they agreed could use a better guardian. She also agreed to let the mill survive, provided they turn to fully sustainable methods, including tree replanting.
With that, the Lady settled in for a period of lull, letting herself settle in the lake for months at a time, only making herself known when some atrocity towards nature occurred, or some foolish student did not listen to the warnings and tried to summon or otherwise influence her with magic. Most of the times these resulted in nothing more than a scare for the students, or in some rare cases, actual discourse if the students were exceptionally courteous and respectful. But occasionally there were still those who would try to summon her and control her, and those foolish mortals would find a horrible reversal when instead the Lady summoned them into her. During this time, she also gained a following of lesser nature spirits, including the Foresty Four and others. (Note: this paragraph covers an enormous amount of the actual book you received, which details every atrocity, and interaction.)
It was a long time before the Lady noticed the corruption. The part of her that she had used to envelop the area would feel a slight tickle occasionally, or that something was off, but something is always a little bit off when you consider the chaos that is the natural world. An animal got sick, well that happens. A water source was polluted, but that could be for any number of reasons, and normally all it took was a good rain for that to be self-correcting. It wasn't until the infection began to infect the Lady herself through her spread consciousness that she took efforts to cleanse herself, expelling it into what would be known as the Dark Wood Spirit.
After realizing the depth of the corruption, the Lady saw the extent of the change but was unsure where it had come from. A non-spirit named Ash communed with her, and she set upon them to find the source of the corruption. While this happened, she took a deeper look into it, and realized the following:

• The amount the corruption affected things was directly related to their size.
• Larger animals' immune systems tried to fight off the corruption, and it warped them, causing strange and horrible mutations to them. At a certain size, the creatures were able to fight it off and remain relatively unchanged.
• Smaller animals' immune systems were not able to fight it off at all, and the corruption immediately began moving them forcing them through thousands of years of evolution in a very short period.
• Most incredibly small animals were completely unaffected, through either lacking any form of exposure or because, for lack of a better way to put it, the corruption did not have enough to work with.

Ash returned to explain the source and was justly rewarded. The Lady hoped this may be the beginning of a non-spirit following for her new demi-goddess phase, but still had a more immediate problem with the corruption.
First, she began to try to undo the work of the corruption by either healing or mercy killing the larger mutated animals, depending on the level of their mutations and pain. Then, she cast her eye towards the smaller animals, which had evolved into human level intelligence in a very short period but retained their animal instincts. She feared that they would just become multiple clans of warring factions doing nothing but finding more and better ways to slaughter each other with their newfound intelligence.
To combat this, she overlayed on each of them a personality of someone she had met during her past. By doing so, they would become distracted by that personality's hopes and dreams and focus on more peaceful activities. While it couldn't completely quell the natural pull of the food chain, it was overall very successful except for the penguins. The penguins were not native the forest, and in fact were just swimming down the river that cuts through Intolerance when they felt the call of something, and turned to go down the underground river that also happened to be the river that was being used by the alchemist as a dump site. They got a far bigger dose of the corruption than anyone else, and while they also got a personality overlay, through some other influence their overall animalistic behavior was not quelled, and they began to act as an invasive species to the forest.
The Lady has asked her spirit followers to organize and begin finding and eliminating leftover sources of the corruption, and that is where we stand today.