After the death of Francisco de Orellana and the other six members of his expedition in the mid 1500s, the South American natives of the region mummified their corpses, armor and all, and sealed them in a secret chamber in the complex. Buried in the shroud with Orellana were a golden mask and the Crystal Skull of Akator. The local natives also buried their own in the cemetery over the years, including many whose skulls had been elongated in an attempt to mimic their gods.
Harold Oxley discovered the secret chamber housing Orellana's remains and took the Crystal Skull with him, leaving behind the gold and other treasures placed alongside the Spanish remains. Unable to open the temple at Akator, he later returned to the site, to return the skull to its place, behind Orellana's head. Committed to the Nazca Sanatorium for the insanity caused by the Crystal Skull, Oxley drew a map on his cell floor showing the location of the grave.
Two months later, Mutt Williams relayed a cryptic message from Oxley to Indiana Jones. Jones deciphered the message as referring to "Orellana's cradle guarded by the living dead". Jones and Williams journeyed to Nazca, where they found Oxley's map of the Chauchilla Cemetery on the floor of Oxley's cell at a sanatorium. Jones then realized that the word used in Oxley's message for "cradle" was a general word for "resting place" and that it meant Orellana's grave. They went to the cemetery.
Since the grave site was still in use, a sign had been posted stating that graverobbers would be shot. The grave site was guarded by a pair of local warriors who dressed as skeletons and carried blowguns to help protect the site from intruders. The "living dead" ambushed Williams and Jones, but Jones reversed the attack, killing one and driving the other off. The adventurers found the entrance to the secret chamber, and reached the mummies of the Spanish explorers. They discovered that while the other mummies were undisturbed, Orellana's mummy had been opened - but the Crystal Skull was present. Jones and Williams pondered on the nature of the skull, including its magnetic properties, as well as why Oxley would return it to its site.
Behind the scenes
In the James Rollins novelization, along with the gold, Indy finds a handful of artifacts from all over the world buried with the conquistadors. He is unable to explain why they are there.
Also, Indy is temporarily hypnotized by the skull before most of the burial chamber collapses, falling hundreds of feet off the plateau.