I ended up doing much the same thing in an old (2e) Al-Qadim campaign. Here is the long story of what I (Balthazar the 1st, Sultan of Taddabur, a dwarven shair15/merchant rogue 11/cleric 12) went through to found the city of Tadabbur:
After we defeated the evil badgal (Tisan the Arch-Geomancer...