The bonus level, which you must either get True Wizard on all of the levels OR just finish them, we aren't sure (EDIT: confirmed by Oldhamer 241, you do NOT need True Wizard on all levels, just beat the game.) is unlocked in Knockturn Alley. Head to the bottom of the alley to find a building, Borges and Burkes.
Before you begin, make sure you have a dark magic character and a key character found and purchased. I used Voldemort and Mrs Cole, but any goblin supposedly has a key. There are quite a few dark magic items and one vault that needs to be opened. Keep in mind that there is more than enough studs, but you have to scour the lego city to find it all.
3 vehicles are located around the area that need to be driven to get a good chunk of blue studs. The lego truck and the red double decker bus are out in the open, but the train will need some steps and dark magic to access it. (Edit: a 4th vehicle has been found! Phoenix C64 reports that finding all of the red and white mushrooms in the forest makes a mushroom car spawn that adds another row of studs worth 30k. Make sure to scour that forest for these things, I didn't find it myself, and it probably would of really helped me.)
When you reach the witch's hut and use Leviosa on the roof, a white ball will spit out. MAKE SURE that ball is moved from its spot where it lands. There is a glitch that makes the ball disappear if you let the tower nearby land on it. You'll need this ball to get into the 2 goals that you'll create.
When tearing down buildings, use the targeting reticule to help you find anything else to blast. If you've recently blasted it, check it again because more often than not you'll open another piece to blast. You won't be able to completely tear down a building.
Check the blind walls because they like to hide purple studs around the far east wall where you can't see. There are also lots of little blue flower spawn spots where the blue flowers just jump out of the ground. When you assemble the hanging flower things on a few of the walls, make sure you blast them to get more studs. You can do this once.
When you reach the trees in the west, some can be blasted and some you can use Leviosa on. The Leviosa trees will spawn little spiders. Target one of the spiders to make them fall off, then you can blast the trees. There are also lots of red mushrooms that will spawn, but they are only worth about 60 studs (30 for the spawn, 30 for the blast). Edit: Find them all for a vehicle to spawn with a line of 30k or so studs. Credit to Phoenix C64 for this find!
Use Aguamenti on bronze speakers to fill areas with water. One building has an Apparition pad that cannot be accessed until you flood the roof. Also make sure you water the brown spots in the corners and then blast the flower that spawns.
While blasting the castle looking thing, you're going to come across a cake. Leviosa the cake to make it land on the wall and paint it red, then cut the wall open. There is a blue flower to the right past the chess board.
I never figured out how to mess with the swimming pool, so if anyone figures it out, leave a comment and I will edit this solution and give credit.
With all of these tips, you should be able to get at least 1 mil studs. The level ends automatically and you get the achievement and a gold brick for your trouble. Good luck.