Based on the Gothic mental institution located north of Boston, in Danvers, Massachusetts, Lost Souls of the Witches' Castle is a story within a story. Dana Etheridge and Nick DeSantis meet on the grounds of the closed facility. Dana is an RN who had done her psychiatric training there ten years ago and Nick is a photojournalist writing a book about Danvers State. Within moments of meeting, they're drawn to each other. With the help of a journal written by a former patient who was placed there in 1919, they discover their own destiny and the powerful effect of love.

The pages of Emily Patterson's journal capture the anger, confusion and despair of the horrors and injustices within the institution's walls. Many of the lost souls that resided there were ignored in death as well as life. But in 1998 a committee was formed and 768 graves were discovered on the grounds of the institution, each one marked only with a numbered marker.

A memorial service was held to acknowledge these people and the release of balloons represented the letting go of the stigma of the past and the beginning of a new age of respect and dignity for people with mental illness. For Dana and Nick, the release of the balloons also symbolizes what they had to release in themselves in order to find their destiny and the connection of their souls.