Lyonesse is doomed, but it is not a doom her people will take lightly.
Just over a century ago, Lyonesse was one of the great powers of the Golden Circle. Her knights traveled through all the realms, questing and spreading her good name, championing the righteous causes of the High King Mark. It was the very flower of chivalry, but those ideals were matched with the resolve, will and learning to understand that ideals need not be naiveté. A staunch ally of Amber, its fields produced abundance for all her trading partners, and her armies of knights were seen on many battlefields.
All that ended on a dark night, 120 years ago, when the bulk of Lyonesse slipped beneath the waves.
There have been many attempts at explanation for what happened that night. Some say that King Mark was struck down, and with the king died his kingdom. Some say that it was an echo of the fall of distant Avalon, a realm said to bear much resemblance To Lyonesse. Some blame ancient magics, curses coming to bear. To this day, none know for sure, and the waters of Lyonesse are dangerous and dark, resisting exploration.
What is known is that only a small portion of this great empire remains. The highlands were far from the heart of the kingdom, and why they were spared while the rest of the nation sank remains a mystery. In the highlands, the local kings have maintained what order they can. With the nation so diminished, their status as a trading partner of Amber is something of a courtesy, but after Lyonesse's long years as a staunch ally of Amber, it's a courtesy they have earned.
Lyonesse was a vast kingdom, and culturally was not far removed from an idealized carolingian france. Culture centered around the knight as the expression of Lyonesse virtues - honor, bravery, artistry, chivalry and all the other trappings of knighthood. They were perceived by some as decadent, with their finery and pageantry (a perception that some tie to the fall) but to their own eyes, they were an advanced, civilized folk.
The highlands were far enough removed from the centers of court that things were a bit rougher around the edges. Many british and celtic elements were woven into the lifestyle there, and while they were accorded respect, they were still something of a backwater. After the fall, this created a schism in the remaining kings. They were all that was left of Lyonesse - were they going to pick up that mantle of culture, or were they going to discard it as an unnecessary frippery in an abruptly more dangerous world? No single answer has emerged, and each kingdom has answered the question in its own way.
Lyonesse is ruled by a federation of local kings. While there have been occasional noises about selecting a new High King, no king currently has the support necessary for the position, to say nothing of the absence of swords in stones and other traditional hallmarks of such things.
This federation is shaky at best. These are proud men (and sometimes women) with their own traditions, families and honor to look out for. It is only the knowledge that a civil war would likely end with Lyonesse as a regency (at best) or a protectorate of another nation (at worst) that has kept things from spinning out of control. For all that, foreign influence can be found in no small number of the courts, all positioning for the day when the "Lyonesse Matter" gets resolved.
Lyonesse still trades with Amber - the destination of the shadowpath was moved after the fall - but it is only a fractional amount compared to what it used to be. The waters of Lyonesse are dangerous and uncharted now, and combined with the minimal amount of trade, traffic to and from Lyonesse is minimal. Saavy merchants recognize this as an even greater threat than foreign invasion - if trade with Amber dwindles to nothing, Lyonesse will be forced to fall back on only a limited range of resources, and barbarism is likely to follow.
Lyonesse had many magical traditions before the fall. Now those - as well as numerous artifacts of note - are lost beneath the waves.
Beneath the Waves
Scavenging the sunken kingdom has become a popular past-time for Pirates and Rogue Rebmans. It's dangerous work - something dark under the water has made certain that not all who seek the treasures of Lyonesse ever return, but a handful of very successful expeditions continues to spark interest.
Scavengers encounter two large problems. First, the land settled some as it sank, so that maps are less reliable than they should be. Not only does this mean that finding the right place to dive is problematic, it also means that the hazards to a ship are many, and a smart scavenger takes regular soundings. Even with those precautions, some report that the terrain shifts, placing new hazards where none previously were, but it's more likely a result of poor measurements.
The second problem is that the mud never settles. The water is not merely dark, it is muddy and full of debris. Rebmans report that it not only impairs visibility, it is akin to breathing in a smoke filled room. It is even said that the unthinkable has occurred on some of these expeditions - a Rebman drowning.
The Spark of Hope
The prevailing explanation for why the highlands were spared is that they are the home to the Graal. The hidden kingdom of Monsalvat is said to have been ruled over by a great king for over a thousand years. Few have seen this king, but many have seen his knights, and according to their stories, he is the keeper of a pair of sacred artifacts - the Graal and the Spear. Some whisper that if those artifacts saved the highlands, perhaps they may also restore the whole of Lyonesse.
The Black Road
The Black Road has not been seen on Lyonesse. Some consider this a small mercy in the fact of other disasters, but others worry that merely means it has been well hidden.
Player-maintained Wiki: lyonesse.roadtoamber.com