There were accusations of mistreatment of patients in the facility and in 2006 the New Zealand Herald reported the Government had apologised to 183 former patients and paid them $10.7 million compensation.
Mr Hardcastle died at the facility in 1960 and was buried in an unmarked grave at Mt View Cemetery. But Mrs McGregor says her uncle is not the only one.
She discovered this after she contacted Marton RSA's Barry Rankin who tracked down the Mr Hardcastle's grave using old council records and maps.
"There's quite a bit involved in finding them," Mr Rankin said. "A lot of the information has been lost and other parts of it are sketchy.
"Just in the immediate area there's about three others but it also is possible there's others in the vicinity. I think in a number of cases the relatives where unaware they were buried there."
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Mrs McGregor hopes to apply to Veterans' Affairs for help marking her uncle's grave but she thinks they should be done en masse.
Head of Veterans' Affairs Bernadine Mackenzie said families had to apply on a case by case basis. The organisation will provide a memorial where an eligible veteran is buried in a service cemetery.
However, if they are in a public cemetery it is up to the family to arrange but they can apply for a financial contribution.
Mr Rankin said information for people who went through Lake Alice was often hard to come by.
"I think there would be a lot of families who didn't want to know anything about them because there was a stigma around Lake Alice," he said.
"It's terrible. It was a really bad situation. When a lot of the funerals took place it would be the undertaker, one of our members and possibly a minister and that was it."
Mr Rankin said the RSA could help with locating graves but funding for memorials was dealt with by Veterans' Affairs.
"For a lot of families it means a great deal," he said.
And that is the was Mrs McGregor sees it.
"It means will remember them. We promised them that."