The lair is at Peach Creek Estates you fight these darkpaper ninjas and their warlord. While your fighting the warlord he runs into the lair which is hidden behind these big rocks if you can't see them then you must be blind.
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As of June 2011, the Past tutorial has been removed from the game, so Fusion Blossom has been moved to a new location. She is currently located at Pokey Oaks infected zone. There is also a higher level Fusion Blossom located at Mandark's Lair, in Genius Grove. It is unknown if this is a duplicate glitch or intended by the makers of FusionFall.
According to Fusion Fall Wiki, she is in Devil's Bluff.
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when the official fusion fall comes out it will cost money the official one comes out janurary 14
Collect all fusion matter needed, do the nano mission, defeat fusion scotsman!!!