MARAWI (REUTERS) - This was the lair of Isnilon Hapilon, Islamic State's leader in Southeast Asia, where he prepared to seize the city of Marawi.

After soldiers failed to stop him here in May, a group of around a thousand Islamic militants laid siege to the city for five months.

Only Hapilon's death two weeks ago signalled the beginning of the end.

His hideout tells the story of how it all started.

Lookouts seemed to already know security forces were trying to arrest Hapilon, and they were well prepared.

The battle lasted three days - with the army firing on the house with heavy machine guns, and militants answering with rocket-propelled grenades.

Hapilon fled through a hole blasted from the back of the house and across a rice field security forces had not secured.

Locals say they were unaware they lived down the street from extremists.

"If we had known Hapilon was the head of the Isis rebels, we would have apprehended him, but we did not recognise him," said village official Mohd Faisal Mama.

Hapilon's escape was a costly failure.

In the end, clashes killed more than a thousand people, and airstrikes tore the city apart.

A fraction of the hundreds of thousands displaced by the fight were allowed to return to Marawi on Monday to find homes ransacked or in ruins.

Many more face a long wait for rebuilding- an effort estimated to cost nearly a US$1 billion (S$1.36 billion).