What are the Lost? It’s an unanswerable question — lest they return. The truth of what they were has been lost to memory and time, as those that lived before their extinction are also passed from Kai’ckul. The Elves seem to have almost purposefully avoided documentation, and as they are the longest-lived creatures, their silence has sealed the uncertainty forever. Finrodel and Melitherian, of the Circle are two of a handful who remain who even witnessed the tail end of the Wars.
Oral traditions and scant writings by the other races have hardly helped with the growing legend of these creatures who now embody what we think of as evil. Each race seems to have grown the Lost into their own tales of bogeymen, even differing from region to region within a single Kingdom or between Holdfasts. One truth remains: the stories of these creatures are tales used to instill virtues and fear, from scary stories around the campfire to fables and homilies used in the rearing of the next generation.
Based on the fragments and best guesses of Gnomish researchers, the Lost could have been creatures bent and broken and aberrations borne from our Draconic Fathers, corrupted with a narrow and amoral code. They could have been other races, much like Dwarves or even Elves, but displaced and seeking roots. They could have even been Men, unwilling to bow to the idea of Enlightenment. Or they could be a combination of any of those concepts. Or none at all. We might never know. Hopefully.