What does "all rot" mean in here?

I expect someone lives there in secret, only coming in and out at night, with a dark lantern. We shall probably discover a gang of desperate criminals and get a reward. It's all rot to say a house would be empty all those years unless there was some mystery.

rot verb /rɒt//rɑːt/ [I or T] (-tt-) Definition: to (cause to) decay
  The fruit had been left to rot on the trees.
  Rain has got in and rotted (away) the woodwork.
  the smell of rotting fruit

Doesn't make sense.

Solution 1:

Rot in this context is a noun which means "nonsense." In that sentence, "all rot" could probably be replaced by ridiculous or absurd and still mean generally the same thing.

Solution 2:

It is a common enough idiom in Britain so that C. S. Lewis, whom you quote, wouldn't have thought twice about using it. One must think of idioms metaphorically, because literally, as you correctly observe, they don't "make sense." If something has some rot, it is partially usable, if it is "all rot," then no part of it is salvageable and it should all be thrown away. In this case, "all rot" means there is not a shred of truth in the statement.