My current idea:
Dwarven Sylvanus is Khaz Barok, The Shield of the North.
Initially a small mining colony settled by the dwarves with the tacit agreement of the Alder who controlled the forest above, Shar Barok (hard to translate, but essentially, "Iron of the North") was a major source of iron and copper for all of the dwarven clanholds.
It operated as such for thousands of years, and was only militarized to become Khaz Barok during the War of the Damned. Some of the deepest mines were closed off, while others were the sites of uncounted battles between the growing city's stalwart defenders and the minions of the Bluestar.
The city helds its own until Quarion the Great finished his Wall, and then settled into a new life as a military outpost first, and a mine second. Khaz Barok stood for a thousand years, with nothing but it's outermost borders touched by war. It is said the Bluestar tried everything to remove them, but that the noble Ancestors of the Northshield clan would intervene on their behalf. Though the aquifer that gave them water was poisoned, crytal clear water would run from their fountains. Though the earth would shake their tunnels and warrens, the old arches would hold.
For 900 years the Clanholds were untouched.
And then the end came, fire and death and horror in a week of disaster. None now alive know how, exactly, Khaz Barok fell. But fall, it did...though its tunnels were sealed, and the strange hole in the deathward repaired, it remains a barren place infested by the unquiet dead.