Mystery surrounds death of grandfather, 86, after his body was discovered inside a home on Phillip Island

Mystery still surrounds the death of an 86-year-old man after his body was discovered at a private property on Victoria's Phillip Island on Monday.

Paul Waylen, a father-of-three who owned his own engineering company, was found dead at a home at the intersection of Church Street and Justice Road in Cowes by tradesmen at around 10am, 9News understands.

Waylen's 55-year-old son was later found at a nearby address in Ventor with allegedly self-inflicted injuries.

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He was taken to St Vincent's Hospital in a stable condition, where he remained under police guard.

The man was later released without charge.

Police said today in a statement the postmortem did not reveal a cause of death.

An investigation into how Waylen died is still under way.

"The exact circumstances regarding the death are still unknown and the investigation is ongoing," police said in a statement.

Detective Inspector Dean Thomas said yesterday police were keeping an "open mind".

"We've got to be aware of there could be a number of different circumstances but we've just got to wait and go one step at a time," he said.

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Locals say the investigation has sent shockwaves through the small Cowes community, which has a population of just under 7000 people.

"It's a bit of a shock to the system, it's a real community area, anything like this shakes the area up," one resident told 9News.

"It's pretty tight-knit down here away from the suburbs."

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Anyone with information is urged to contact police or Crime Stoppers on 1800 333 000.

Readers seeking support can contact Lifeline on 13 11 14 or beyond blue on 1300 22 4636.

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