  We have observed the nucleus of the nearby luminous infrared galaxy NGC 4418
with subarcsec resolution at 860 and 450 micron for the first time to
characterize its hidden power source. A ~20 pc (0.1") hot dusty core was found
inside a 100 pc scale concentration of molecular gas at the galactic center.
The 860 micron continuum core has a deconvolved (peak) brightness temperature
of 120-210 K. The CO(3-2) peak brightness temperature there is as high as 90 K
at 50 pc resolution. The core has a bolometric luminosity of about 10^{11}
Lsun, which accounts for most of the galaxy luminosity. It is Compton thick
(N_H >~ 10^{25} cm^{-2}) and has a high luminosity-to-mass ratio ~500 Lsun/Msun
as well as a high luminosity surface density 10^{8.5+-0.5} Lsun pc^{-2}. These
parameters are consistent with an AGN to be the main luminosity source (with an
Eddington ratio about 0.3) while they can be also due to a young starburst near
its maximum L/M. We also found an optical color (reddening) feature that we
attribute to an outflow cone emanating from the nucleus. The hidden hot nucleus
thus shows evidence of both an inflow, previously seen with absorption lines,
and the new outflow reported here in a different direction. The nucleus must be
rapidly evolving with these gas flows.
