Nest unknown in lake (5)
I believe the answer is:
eyrie
'nest' is the definition.
(eyrie is a kind of nest)
'unknown in lake' is the wordplay.
'unknown' becomes 'y' (algebra).
'in' is an insertion indicator.
'lake' becomes 'erie' (Lake Erie is one of the Canadian/US 'Great Lakes').
'y' placed into 'erie' is 'EYRIE'.
(Other definitions for eyrie that I've seen before include "Eagle's lair" , "lofty dwelling" , "highly placed house" , "animal home" , "elevated position" .)