Grandpa has seen the lair several times in the show, but was never able to show it to any of his family (when Beverly investigates the doghouse at her father's behest, she finds nothing). In the season one finale The Lair, he ventures the lair in hopes of filming it which puts him on an epic journey throughout the farthest reaches of the lair. In the season two finale simply named Finale, Grandpa once again finds himself in the lair again. Except this time, he reaches it by falling from a buried coffin, revealing that all the graves in Old Town cemetery were dug out from the bottom and all lead to the lair. This episodes reveals that the lair is even bigger than we thought as it contains an entire city.
It's shown throughout the series that the lair contains a blood waterfall, a stadium, a pyramid made of dead bodies, a temple, a tavern where prisoners are served beverages in human corpses, and a lake that can be travelled through in a ship made of human parts.