A aged Watson (Gareth David-Lloyd) asks his nurse to record the "lost" great adventure of Sherlock Holmes, one they had kept secret all these years until now. It turns out that Sherlock (or Robert, as he is apparently known) and Watson investigated reports of a Kraken attack at sea, followed by dinosaur mauling throughout London. Apparently Sherlock's long lost brother was shot (mistakenly) in the back by Inspector Lestrade when they were in the army, leaving him paralyzed.
Undaunted, he built himself a robot body, a Robot Accomplice, and set about seeking his revenge - namely, making a robot dinosaur and Kraken rampage around and steal things in order to raise money to...frame Lestrade for murdering the Queen by sending Robot Accomplice (with a bomb inside her) into Buckingham Palace. This plan is foiled when Sherlock chases after his brother (now flying over the city in a giant mechanical dragon with a kidnapped Lestrade), shooting down his contraption, and ultimately shooting him.
Out of respect for the family tragedy (and because Sherlock felt the populace wasn't ready for rampaging dinosaurs), the story was not published. Until now of course... Watson finishes his recounting and promptly dies. His nurse goes to put flowers on his grave, where we see Robot Accomplice (supposedly 'killed' by Watson) visiting the brother's grave.
Thanks Mary C!