The legendary "Ciudad Blanca" of Honduras was first referred to under the name Xucutaco by the Spanish conquistador Hernan Cortes already in 1526. Located in the remote, impenetrable and incompletely mapped rainforest of the Mosquito Coast, it was never conquered by the Spanish. With the time, it was slowly abandoned and forgotten. Two JERS-1 and one ERS-2 SLC Synthetic Aperture Radar (SAR) images have been used to identify and to locate the lost city, a task made difficult due to the thick vegetation cover. To this end, advanced processing tools for the detection of artificial targets under forest cover, and for SAR data fusion have been used. Among the techniques used, a new Bayesian Distribution Entropy Maximum A Posteriori (DE-MAP) vector speckle filter, particularly suited for the restoration of a strongly textured scene, has been used to enhance the SAR images. This new speckle filter incorporates a statistical description of the effects of the SAR imaging system: in order to account for the effects due to the spatial correlation of the speckle in SAR images, an estimator originating from the local spatial autocorrelation function (ACF) of the SAR signal are incorporated to this filter, to refine the evaluation of the non-stationary first order local statistics, to improve the restoration of the scene textural properties, and to preserve the useful spatial resolution in the speckle filtered image. On the other hand, radargrammetric techniques have been used to: i) produce a Digital Elevation Model (DEM) of the study area; ii) fuse ERS and JERS information in order to allow visual identification of the remnants of Ciudad Blanca by visual photo-interpretation. Using the processed images, geocoded UTM spatio-maps of the region have also been produced to locate accurately our findings, and guide a ground expedition in the future.