In Chapter 4, just after you do the first chess puzzle, you will get chased into
a hole by the giant unbeatable card monster. When you first arrive down there, 
go a short distance ahead and look at the right wall to find a heart stone. Shrink
down to learn that it is a fake rock. Run into the keyhole tunnel. On the other 
side will be a floor where you can use a bomb to break. Do so, then go down the 
stairs to get a memory and some extra teeth. Notice the skeleton sitting on the 
chair. It is Raz from Psychonauts. He can be identified by the red goggles, his 
shape, and the position that he is in (which is the stance he uses for a mind 
attack). With this in mind, it looks like Raz is dead, and there will be no 
Psychonauts 2.