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The Lumber Yard is the area of Zombie Island, from The Zombie Island of Dr. Ned, where The Mill Is located. It is the last unlocked area of the DLC and can be only accessed by completing the story missions, the area is filled with zombies and Tankensteins and is very linear.
Trivia Upon entering the lumber yard, a crashed van can be seen called called 'Mystery machine', this is very likely a reference to Scooby Doo.