The Australian has a feature on lost works potentially from the 'Western canon' ... here's a couple excerpts:

Homer, Margites

IN the fourth chapter of his On the Art of Poetry, Aristotle wrote: "Homer was the supreme poet in the serious style ... the first to indicate forms that comedy was to assume, for his Margites has the same relationship to our comedies as his Iliad and Odyssey bear to our tragedies."

The Margites, it is claimed, was Homer's first work. The name of the hero, Margites, derives from the Greek margos, meaning madman. All that is left of Homer's comic epic are a few lines, pickled in other works. The Scholiast, writing on Aeschines, gives a thumbnail sketch that fits with his etymologically unfortunate name: "Margites ... a man who, though fully grown, did not know if his mother or father had given birth to him and who would not sleep with his wife, saying he was afraid she would give a bad account of him to his mother."

Plato and Aristotle each record a snippet of the poem. From Plato's fragmentary Alcibiades we learn that "he knew many things, but all badly". Aristotle, in Nicomachean Ethics, offers a different hint: "The gods taught him neither to dig nor to plough, nor any other skill; he failed in every craft."

[...]

Aeschylus, the lost plays

AESCHYLUS wrote more than 80 plays. Only seven have survived, although copious fragments persist on papyrus or in commentaries.

Much of the blame attaches to Ptolemy III (247-222BC), who ordered the systematic cataloguing of all 200,000 scrolls in the Library of Alexandria.

When this labour began in earnest, an anomaly of unthinkable proportions was discovered. The library lacked a complete text of Aeschylus. Given the reverence in which the Athenian dramatist was (and is) held, this seemed an unforgivable oversight.

There was, however, only one such text in existence. It belonged to the Athenians.

After, one assumes, protracted negotiations, it was agreed that these precious scrolls might be transported to Alexandria for scholars to make an accurate copy, then returned to Athens.

To ensure that this agreement was honoured, Ptolemy III would deposit 15 silver talents with the Athenians, repayable when the text was brought back intact. This was a phenomenal amount of money: the entire annual Jewish tribute payment amounted to only 20 silver talents and that had driven them close to rebellion. Following the agreement, the manuscript arrived in Alexandria.

This was the sole complete copy of Aeschylus and was worth losing 15 silver talents for. The scripts stayed in Alexandria, with a strict injunction that no copy should be made. Then Ptolemy III died. Later, Ptolemy XIII died. Their empire died. Their religion died. But the manuscript remained.

Since its transcription was forbidden, scholars flocked from around the known world to read works such as The Priestesses, Phineus, Sisyphus Rolling the Stone and Sisyphus the Runaway.

But on December 22, AD640, a reader with a very different agenda was in control of Alexandria. Where literary works were concerned, he was strict: "Those which disagree with the Word of God are blasphemous, those which agree, superfluous." Amrou Ibn el-Ass, on orders from his caliph, decreed that the library be burned. The scrolls opened a final time, unfurled by the flames, and the complete works of Aeschylus became lost forever.