After the first Titan war, the Olympians were weak. Attempts on their lives happened almost daily. In their desperate time, a being came to them. Chaos offered them his aid, in return, the Olympians would send him demigods and many other heroes to serve in his army. Chaos would take heroes from the Underworld and bring them back to life, train them, and then have them wait until they were summoned by an Olympian where they would serve them until they were relieved or killed.
Percy Jackson died during the final battle at the foot of the original Mount Olympus. Gaea had slain him, but she could not escape from his grasp. The Primordial Goddess had summoned a hole that led straight down into Tartarus, planning to throw the son of Poseidon into it to show that a demigod couldn't defeat a Primordial. What she didn't expect was for him to drag her along too.