Hell's Island is a mysterious German town, theorized by Johnny Toast to be in another dimension, where Johnny Ghost finally returned to Earth and regained his human form. It is an island that has been overrun by some kind of demonic possession that has killed and/or mutated most of the population. Barnacle was shown to be living there.
This place is the main setting of the ending arc of Johnny Ghost's Puppet Arc.
At some unknown point in time, the entire townsfolk was killed by "The Infection", the only survivor of which was a mysterious girl who refused to give her name (and may not be a real person). After Johnny Ghost returned to Earth via a portal, he crashed down into the town of Hell's Island, once again in his puppet form. Johnny Toast, who had been on the lookout for any signs of Ghost's return, spotted him coming down and immediately travelled there to meet him. They both then explored the town, accompanied by the girl in full SWAT armour and gas mask. At first the girl believed that Ghost was infected, but she later figured that he was just "stupid".
The trio ventured into the graveyard behind the church, where Toast came upon the idea of using peanut butter to return Ghost to human form. The plan worked, and PIE was once again complete. However, the girl was also revealed to have the appearance of a corpse, although she claimed it was a full body suit.
Ghost's humanity restored, the team went about trying to escape the town. They explored a crypt, where the girl got the nickname "betrayer" and later "barnacle" after Ghost and Toast got locked in a room by themselves as the corpses rose from their graves, whilst she was outside.
Some time after this, they came to the train station and searched for a key to open the train doors. Ghost became separated from the others and
at this point that he saw Toast's cat, Marshmallow, which had been horrifically deformed by the infection. He quickly put it out of its misery.
Eventually, Toast broke into the room containing the key, from whence they entered the train and left Hell's Island.