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This optional area can only be accessed by blowing up the "weak wall" with the Lotus Assassins' rockets in the Ruins. Your goal is to make it to the back chamber for a relatively difficult battle and then reap the rewards. On the way back out, you'll be presented with a mini side quest.
1 - Arrival
After dealing with Stabber Yuxi and the other ghosts back in the Ruins, you'll find yourself in a quarry filled with long-dead convicts.
2 - Convict Ghost Ambush
When you reach this point, you'll be ambushed by four Convict Ghosts. Focus on taking out one at a time while evading their Ice Shard projectiles. Once you've reduced the fight to just one or two, you shouldn't have any issues finishing them off.
3 - Bones
Check these bones to find 50 silver pieces and an Inferior Intimidation Gem.
4 - Strangler Jizu
A former convict named Strangler Jizu will materialize in front of you when you reach this back chamber. Evidently you're on his turf and he wants you dead. This can be a difficult battle, however there is a strategy to it. He can replenish his life fully by consuming one of the surrounding Convict Ghosts (similar to Malak in KotOR), so you should first defeat all the minor ghosts before attempting to punish Jizu. There are nine of them, though you should only have to face five. Be sure to avoid Jizu's Dire Flame style and you will be fine. Use area attacks often to spread out the ghosts if they are too close for comfort.
After the battle, Turnkey Shiji appears and relates his story. For Open Palm points, offer your help, and for Closed Fist points, you'll have to kill him. Whichever route you choose, you'll receive The Wanderer's Jewel essence gem.
5 - Vase
Smashing this vase will net you a considerable amount of silver, an Intuition Gem, and a Scholar's Gem of Forethought.
6 - Chest
This chest contains quite a few silver pieces.
7 - Bones
Check these bones for yet another pile of silver.
8 - Little Girl
On your way out of the quarry after facing Strangler Jizu, you'll encounter a dead little girl who needs your help to escape. Apparently she can't walk through the puddle that sits in the center of this room, so she wants you to cause a cave-in so she can skip across the rocks to the other side. If you agree to help her and smash the poles holding the ceiling in place, you'll earn some Open Palm points and 350 experience points. If you refuse to help her and leave her to suffer in this watery tomb, you'll gain Closed Fist points but no experience.