Old Greyhawk Castle, Level 5

 Catacombs. 

Centered around a strange font of black fire and gargoyles. [3]

Sloping passage / stair complex

About a third of one level was given over to a special complex, and most of the other passageways through the level accessed this portion so as to invite entry.  Inside it, long passages sloped gradually down to a central area where a flight of stairs conveyed the wayfarer back up to the elevation of the surrounding area.  However, once inside, the number of direction choices was seemingly far greater, although all eventually led back to the central declivity, the stairway back up. [16/293] This is not located for sure on level five, but the statement that The PCs altered their route so as to explore" and were surprised to find monsters that aren't very tough for so deep a level [16/293]  would indicate it cannot be much further down than fifth, maybe even higher up.

The Great Stone Face of Greyhawk, the Enigma of Greyhawk

A "towering block of carved stone ... located in a large open area of one of the mid-levels of the dungeon complex, a circle of strange runes and pictograms were carved around its base, and impervious to read magic and comprehend languages, radiates several sorts of magic, attracts wandering monsters".  [16/288]

The Great Stone Face was a large Easter Island looking statue, illustrated by Gygax himself in the Greyhawk Supplement. [16/288]

Mid-levels could be anything from level 5 to 8.

Erac's Cousin was lawful good, but he was also greedy, a trait that the wizard Bombadil was able to use to his advantage.  Deep in the dungeons of Greyhawk Castle there stands an enormous stone statue known as The Great Stone Face, or The Enigma of Greyhawk. A ring of strange runes circle the base of the statue, and the statue itself radiates magic. Many adventurers have tried in vain to unlock the enigma's secrets.  While adventuring alone in the dungeons Bombadil placed a Magic Mouth spell on the stone face that when triggered stated, "The ways of balance need to be maintained.  Give your most prized possession as a gift freely to one who walks the path of balance and your great reward will follow in short time."  Shortly thereafter Bombadil returned to the chamber of The Great Stone Face, this time accompanied by Erac's Cousin.  While exploring the area Bombadil conveniently placed himself out of hearing range of the spell.  As planned his unnamed companion triggered the spell, and a short time later donated a potent magic item to the sly Bombadil, who just happened to be the first neutral character Erac‘s cousin ran into.

The moral of this brief tale is a simple one: If the DM places something that seems insoluble in the campaign, if it defies attempts to unravel its mystery for a prolonged period, the players will likely take over and make something else of it.

Deep in the dungeons would indicate this is on a lower level than five, maybe up to 8 which still is mid-levels. 

I suspect there really was no explanation behind it. It just was a monster magnet and a way to puzzle players. Gygax commented that he did not want to release the real background, but rather several possible explanations, as: "the very best part of mysteries is keeping them that".  

[References: see Greyhawk References]