We investigate the effects of a low frequency (acoustic) phonon bath on the dynamics of a quantum dot modelled as a cascade three-level system. We show that the phonon bath appears to the upper transition of the cascade system as a broadband reservoir of inverted rather than conventional harmonic oscillators. The action of the annihilation and creation operators of the inverted oscillator are interchanges relative to those of the usual harmonic oscillator that it serves as a linear amplifier to the system, and thereby gives rise to unusual features in the dynamics of the quantum dot. We find that the phonon bath, although being in a thermal state, affects the quantum dot as a correlated-type reservoir which results in the decay of the system to a correlated two-photon state with the population distribution no longer obeying a Boltzmann distribution. It is particularly interesting that even for a zero temperature phonon reservoir the steady state is a correlated state which under appropriate conditions on the Rabi frequencies and the damping rates can reduce to a strongly correlated pure state. It is shown that the two-photon correlations result in a significant squeezing and strong two-photon correlations in the radiation field emitted by the quantum dot. The presence of the correlations in the system is manifest in the presence of quantum beats in the time evolution of the populations and the radiation intensity. The effect of the ordinary spontaneous emission on the features induced by the phonon bath is also discussed.