[Zamastan]

The area between High Fells and Bears Armed seems to be mainly mountainous, and -- at least on the Bears' side -- sparsely populated: I wouldn't recommend it for this purpose.
Also, I think that still giving it enough of a coast for access from (or by planes flying over) international waters would be a good idea.
Between Laeral and LOM might work, but is rather "off-centre" as far as the region's distribution of lands & [at present] nations is concerned: If not in its current location, then how about on the coast just south of Lauchenoiria?

How about we open this up to more public participation? I think there are a lot of good ideas on where to place it (I would be in support with your idea of just south of Lauchenoiria and above Vulkaria), but I'd also like to hear more ideas for placement!