Welcome to another installment of the Constellation series! This will be short and sweet; quite a feat as the Lyre is actually a complicated constellation.

There are actually a good few interpretations of why the lyre was placed into the sky, but they almost exclusively trace back to Orpheus. Hyginus describes most of the theories in his 'Astronomica'. I'm going to quote the whole thing and then disect it later on:
"The Lyre was put among the constellations for the following reason, as Eratosthenes says. Made at first by Mercury [Hermes] from a tortoise shell, it was given to Orpheus, son of Calliope and Oeagrus, who was passionately devoted to music. It is thought that by his skill he could charm even wild beasts to listen. When, grieving for his wife Eurydice, he descended to the Lower World, he praised the children of the gods in his song, all except Father Liber [Dionysos]; him he overlooked and forgot, as Oeneus did Diana [Artemis] in sacrifice. Afterwards, then, when Orpheus was taking delight in song, seated, as many say, on Mt. Olympus, which separates Macedonia from Thrace, or on Pangaeum, as Eratosthenes says, Liber is said to have roused the Bacchanals against him. They slew him and dismembered his body. But others say that this happened because he had looked on the rites of Liber. The Muses gathered the scattered limbs and gave them burial, and as the greatest favour they could confer, they put as a memorial his lyre, pictured with stars, among the constellations. Apollo and Jove consented, for Orpheus had praised Apollo highly, and Jupiter granted this favour to his daughter.
Others say that when Mercury first made the lyre on Mount Cyllene in Arcadia, he made it with seven strings to correspond to the number of Atlantides, since Maia, his mother, was of their company. Later, when he had driven away the cattle of Apollo and had been caught in the act, to win pardon more easily, at Apollo’s request he gave him permission to claim the invention of the lyre, and received from him a certain staff as reward. When Mercury, holding it in his hand, was journeying to Arcadia and saw two snakes with bodies intertwined, apparently fighting, he put down the staff between them. They separated then, and so he said that the staff had been appointed to bring peace. Some, in making caducei, put two snakes intertwined on the rod, because this seemed to Mercury a bringer of peace. Following his example, they use the staff in athletic contests and other contests of this kind.

But to return to the subject at hand. Apollo took the lyre, and is said to have taught Orpheus on it, and after he himself had invented the cithara, he gave the lyre to Orpheus."
Some also have said that Venus and Proserpina came to Jove for his decision, asking him to which of them he would grant Adonis. Calliope, the judge appointed by Jove, decided that each should posses him half of the year. But Venus, angry because she had not been granted what she thought was her right, stirred the women in Thrace by love, each to seek Orpheus for herself, so that they tore him limb from limb. His head, carried down from the mountain into the sea, was cast by the waves upon the island of Lesbos. It was taken up and buried by the people of Lesbos, and in return for this kindness, they have the reputation of being exceedingly skilled in the art of music. The lyre, as we have said, was put by the Muses among the stars.
Some say that because Orpheus first favored love for youths, he seemed to insult women, and for this reason they killed him." [II.7]

According to myth, Orpheus (Ὀρφεύς) was a legendary musician, poet, and prophet, who was literally so good with the lyre, he could charm anyone with his music. He is so good, in fact, that when his wife dies of a snakebite, Orpheus travels to the Underworld, charmes everyone in it, talks to Hades, and brokers a deal: if he trusts Hades to send his wife Euridice after him, up to the surface, he will have her back. Orpheus needs to look straight ahead--never back. He amost makes it to the surface before he does check to see if his wife is there; she is, but has to return to the Underworld now Orpheus broke his end of the deal.

Hyginus describes quite well how the lyre came to be and how it came in Orpheus' possession. The last sentence needs some more explination, though. Hyginus mentions what happens to Orpheus in the first paragraph, but not very clearly.

After his failed attempt to resque his wife, only music brought joy to Orpheus. He rejected the Gods--all but Apollon, whom he saw as the sun. Orpheus became a wanderer, moving about to bring his music to people. One day, he stumbled upon Maenads--female followers of the God Dionysos--who scorned him for not worshipping their God anymore and tore him to shreds. It is said that his head still sung, even after it was torn off.

Orpheus inspired an entire cult movement, and his impact on the ancient Hellenic religion is notable even today. Many of the mystery cult's works--including the Orphic Hymns--remain. I must now return to the plumber, but hope the constellation Lyra can keep you entertained for the time being!