The great flood was a fearsome, wide-ranging storm that occurred all across the Great Eastern Sea including the Sea of Time over a century ago in Weyard's past. Not much historical context about this event is provided in the games other than that the flood claimed many lives all across the continents affected, but it is important to the histories of Babi and Lunpa the Righteous Thief.
Babi and Lunpa had both previously founded and settled their respective settlements of Tolbi and Lunpa. But then the great flood transpired, and the two of them were among the many that had to flee their homes by boat. Babi and Lunpa's boat was caught up in the roiling waves, and eventually driven into the normally inaccessible interior of the Sea of Time where the mythical society of Lemuria lay hidden. This, of course, caused Babi and Lunpa to stay at Lemuria for a brief time, and Babi fled Lemuria on a Lemurian Ship with a stockpile of life-extending Lemurian draught in tow while Lunpa was left behind.
Babi would end up ruling Tolbi for over a hundred years because of his draught, while Lunpa would remain alive and well at Lemuria even to this day because of drinking the life-preserving springwaters at Lemuria. Because Lunpa essentially disappeared from the eyes of the rest of the outside world forever by being caught up in the great flood, it was presumed that he had lost his life then. This affected his son Donpa enough that he spoiled his own son Dodonpa to make up for it. Dodonpa grew up to be a notorious thief because of this, leading him to a life of evil deeds and his re-establishment of Lunpa's former community of noble thieves into an empire of ruthless ones.
Discerning from the Mind Read-able text of a certain citizen in Lunpa's town in Golden Sun, "hordes of monsters appeared right before the great flood." This same citizen believes that the way Mt. Aleph's recent eruption caused monsters to appear all over the world may be a sign of another flood in the future; his premonition appears to be right, since the finale to the first game involves the tidal wave.