From Zelda Wiki.org
Kayo was once the assistant of the fortune-teller
Astrid in
Phantom Hourglass. He was the only one who knew how to open Astrid's back room in her basement.
Link can find a book in his house, saying
If you are reading this, I have fallen to fate. Look to the east to pick up my torch. After Link finds the remains of Kayo on the most easterly point of the island, his ghost appears, and informs Link how to open the room. He is an inhabitant of the
Isle of Ember. It is unknown how he died. Later in the game, upon returning to the island, Link finds Kayo has been properly buried. His spirit stays on the island however, and helps Link find a treasure map.