In 1860, Thunder Mesa was hit by a major earthquake which destroyed most of the town and killed multitudes of its residents, including mining baron Henry Ravenswood and his wife, Martha. Many attribute the quake to an Shoshone prophecy about the Thunderbird, whose ire was drawn to the town for their plundering of Big Thunder Mountain's gold ore - this same quake would twist and bend the mine train tracks on the mountain.
Regardless, numerous lives were lost, to the point where Thunder Mesa nearly became a ghost town. However, the resourceful settlers eventually rebuilt, and Thunder Mesa was restored to some semblance of its former self. Yet the souls of those killed in the quake could not rest easy, and some say continued to linger about the ruins of the old town.
It is not made clear if Phantom Canyon is simply an abandoned part of Thunder Mesa located elsewhere (possibly behind Ravenswood Manor, as depicted on some souvenir maps), or if the town is supposed to be a warped and nightmarish echo of the tragedy when witnessed in the attraction; the latter is regarded as true by many fans, and has made its way into Jason Surrel's The Haunted Mansion: From the Magic Kingdom to the Movies, as well as being clarified show producer Jeff Burke. However, the former cannot be entirely discredited as a possibility.
In the Attraction
After guests escape the confines of the catacombs, their buggies emerge from a cave and onto the dusty streets of Phantom Canyon. The buildings here are sagging, twisted and broken, looking like they are about to fall apart, and the ground is split in places by glowing fissures - evidence of the fateful earthquake. Big Thunder Mountain can be seen looming in the distance, surrounded by storm clouds, and the sky is full of wispy spirits.
Many of Phantom Canyon's scene are reminiscent of classic Old West archetypes, as played out by the ghosts of its former inhabitants. As they enter the town, the undead mayor (voiced by Ghost Host original Paul Frees) welcomes them with a tip of his hat, though his entire head comes off in the process; meanwhile, a ghoulish ticketmaster (who may look very familiar) seems to offer passes to board the local ghost train. An apothecary appears to be drinking his own concoctions, while a honky-tonk specter plays piano for invisible gamblers at the local saloon. Across the street, a gunfight takes place as a cowardly lawman trades shots with a bank robber, who stands on one side of a crevasse and tries to pull his frightened, loot-loaded mule across the gap.
Before they can leave Phantom Canyon, the Phantom shows up in his most hideous form to laugh and point guests toward an open coffin. Ahead, Phantom Manor stands on a hill overlooking the town, and the buggies travel past the Phantom and into a tunnel at the base of the hill, where Melanie Ravenswood's skeleton shows the way out.