The Cult of Scylla is known to have been in existence from 194-204. It began when a mysterious priest (whether Tavara, one of his henchmen, or an Undine in disguise) began to preach in Cademia about the power of sea monsters (Scylla). He preached that the Scylla were gods who controlled the sea. The cult grew and even defied the authority of the Third Tyrant.
Perhaps Tavara started the cult merely to challenge the Tyrant and bring freedom to the Mages, or perhaps he wanted to take over the world, or perhaps the Undine were truly behind the cult, wanting to bring the humans to their side of the elemental battle.
The cult's temple remains in a cave in Northwest Cythera. During the days of the cult, the Scylla followers lived in the temple, where they slept, studied, ate, and worshipped. Through the temple is a cave full of Polyps, a Hydra, and (in the underground bay) Scylla tentacles.
A book in the temple discusses how members are initiated into the cult. It describes the maze that Omen sends Bellerophon through when he first arrives in Cythera, confirming the Undine's connection with the cult. This "Maze of Initiation" is located in Cademia, although Omen was able to teleport Bellerophon there from LandKing Hall, so perhaps the Undine or Tavara could teleport their new recruits to the maze from anywhere in Cythera. It is also possible that the maze isn't really located in Cademia, as the upper level doesn't seem to fit in Cademia anywhere.
The inner circle of cult leaders were known as the Inner Brotherhood. The Inner Brotherhood had a separate stronghold quite a ways east of the Temple, near the Titan's Spine mountains. This stronghold consists of two storeys, the ground level and an underground level. Throughout the stronghold, there are six bedrooms, a kitchen, a storeroom, a dining room (with 6 seats), two workrooms, a library, eleven cells that seem to be prison cells, several empty rooms, and a passageway that lets out near Tavara's fortress. This seems to imply that there were six members of the Inner Brotherhood.
An Elder of Pnyx, Diones, either wrote or received a report on the Cult of Scylla. His agent discovered that there were "hidden chiefs" within the cult, intelligences that only the inner circle were aware of. These chiefs were likely the Undine, and the six members of the Inner Brotherhood were the only ones aware of the Undines' influence on the cult.
The Third Tyrant eventually sent a troop out from Cademia to destroy the cult. He sent his unnamed "bravest commander" and his best weapon, the Sword of Heroes. The troop headed Northwest and found the Temple, but exactly what happened there is a mystery. The cult was never heard from again, but the troop did not return. There is some discrepancy even over the date that the troop set out. Although the Hintbook says it was in 204, an in-game book ("Lost Cult of Scylla") says that it was shortly after the troop left Cademia that Alaric appeared and killed the Tyrant - which was in 216. The book speculates that perhaps it was the powers of Alaric that destroyed the cult, rather than the Tyrant's troops.
When Alaric appeared in 216, he simply said "the rule of the Tyrants is over," and the Tyrant and all his supporters died instantly. It is entirely possible that Alaric's powers destroyed the Tyrant's troop in the Temple, though it is also possible that they were defeated by the polyps, Hydra, and Scylla.
A brief note found on a skeleton in the temple reveals that Tavara accepts the possibility that the temple (called the "Outer Temple") will be defeated, but insists that the Inner Brotherhood must be protected. The temple today is filled with many skeletons. They seem to be a mixture of cult members and the Tyrant's troop.
In his journal, Tavara writes that Undine were very concerned over the fall of the Outer Temple.
Although Tavara and three others still live as liches, there is no evidence that they've done anything productive since the destruction of the cult, and they do not seem to be working with the Undine anymore.