Lost Chao Locations
Locating the Ancient Ruins:
Play through the level and between checkpoints 5 and 6, there will be a section where you have the choice between grinding a purple or orange rail. Choose the purple one! It will take you right to the Ancient Ruins (and the 6th checkpoint will be just ahead). You may want to activate the checkpoint as reaching the Lost Chao can be difficult.
Finding the Lost Chao:
Activate the ruins with the Mystic Melody and two platforms will appear. Jump onto these and you will reach a long rail that you will need to grind. This is a bit tricky as it curves upwards and there are no sprints or boosts to help you gain speed! You have to make a precise homing attack to hit the rail fast and crouch. At the top you will get to another Ancient Ruin. Use the Mystic Melody and another trail of rings will appear. Use the Light Shoes to light dash across to reach an area with floating platforms with rails. You can safely ignore the tilted rails on the side, and just focus on making your way via the middle rails. At the end, you’ll come to a tunnel with a Chaos 0 type enemy guarding a vertical rail. Defeat the enemy and the Lost Chao will be waiting on a platform at the top of this area! However.. getting up this rail is quite tricky. Personally I had the most luck trying to time a bounce attack and grinding the rail on the ‘upwards’ movement. It might require some skill, luck, time and patience!