Llake Villarrica or, as the Mapuche called it "Mallolafquen" (from the words "mallo = white clay and "lafquen" = lake, is located in the Chilean province of Cautín, in Chile's northern Patagonia (39°15'S, 72°06'W). It is the source of the Toltén River (where giant water snakes have been sighted). As we will see below, it is also home to one (or more) strange creatures.
The lake's main axis is about 22 km long (14 mi.) in an east-west orientation, and its north-south axis is 11 km (7 mi.) wide. At its eastern tip is the city of Pucón, and on its occidental side is the town of Villarrica.
Villarrica was first settled by the Spaniards in the mid 1500s until the Mapuche razed the town in the early sixteenth century. The town gives its name to the lake and to nearby volcano Villarica (2.840 m - 9,311 ft.), just south of the lake.
Its surface area is 176 km2 (68 sq.mi.) and its mean depth is 120 m (393 ft. - 721 ft.) at the foot of the Andes.
There is an online video at Youtube that shows what is described as the "monster at Lake Villarrica", and which I have embedded below: 
The images show something with a cylindrical shape, much longer than its diameter, similar to a tree trunk.
I would like to point out that the lake is getting more and more contaminated from several sources (raw urban sewage, fertilizers washed in from the surrounding fields, etc.), these have packed the lake full of nutrients that have promoted an algal bloom (that is, an "eutrophication" process in the lake. This has not only damaged the water quality (polluted and now more turbid) but also promoted a runaway growth of algae.
Could the so called monster be a bunch of floating weeds pushed by the waves and the wind? is it a mass of algae rotting on the surface? is it just a tree trunk? or could it be some kind of unknown herbivore aquatic mammal flourishing on the abundant aquatic vegetation?
A real mystery.
 Mounstro del Lago Villarrica [sic] por Aguscanal.
Administrador. (2010). ALERTA: deterioro de la calidad de las aguas del Lago Villarrica. 26.08.2010.
Patagonian Monsters - Cryptozoology, Myths & legends in Patagonia2010 International Year of Biodiversity Copyright 2009-2010 by Austin Whittall ©