I found it...
As the story goes Pedro went out for a quick defeat of the latest uprising in the Mayan conquest. In doing so he left his lovely Beatriz and their 5 year old daughter at home to mind the palace. Due to a landslide, he never returned alive. It was within days after his death that the Doña Beatriz seized control of the government and was in the Cathedral of the Palace with her attendants and her daughter. There was a catastrophic storm combined with an earthquake resulting in the lake that was at the top of Volcano Agua falling down to the bottom of Volcano Agua destroying the Cathedral of the Palace and those inside, as well as the majority of the city.
This story has always intrigued me. And for the most part it is easy to verify the general context of historical in this region accounts by walking up to the buildings and seeing and touching them.
Here is the now of this building. Antonio and I were holding meetings one day with the National Police in Ciudad Vieja. I was noticing a set of ruins inside of the school / community center. Then it hit me, this school was the Palace of Ciudad Viejad it had been renovated into a beautiful community center. And just for verification, I read the plaque that said what my keen sense of archeological intuition already knew. This was the Cathedral of the Palace that I had been looking for. Never mind that fact that everyone that lives in Cuidad Vieja already knew this fun fact. For them they never shared my enthusiasm. But I feel much better now.