Didn't realise this thread was still about!
I picked up a copy of Kalamar and I really like it!
I think the Young Kingdoms is the place for this game.
I'd add a knightly order that spans Kalamar and the Young Kingdoms - possibly linked to Knight of Gods worshipers. Founded by the long dead dragon riding paladin/champion guy whose name I can't recall right now... Think that'd fit right in.
The campaign would be revolving around the PCs running a small mining town, on the borders of Korak and just into the Eldor Mountains.
Area seems just right: hobgoblin nation, bickering nobles, nearby desert, lizardmen swamps and mountains full of 'stuff'. Plenty of variety.
Really do like the hobgoblins - they look like a lot of fun
Organisations are fun too. Blue Serpent is particularly amusing!
Not definitely set on Kalamar yet, another setting under consideration as well. Even if I don't use Kalamar it was well worth a read.
Thanks for the suggestions!