I say the Isle of Despair. Isolated, no wants to go here and if they find out they can't leave. I think the other reason this is a one way trip is because this where Bates saved Chukka from the experiments and he has dealings with the gnomes. Perfect place ain't it.
There is no real laboratory to find in Arcanum (at least no one's ever claimed to have found it). I believe gargob was merely speculating where it would be if they had put it in the game and rationalizing his speculations.
It's actually in an alternate universe and they use a modified version of the teleportation spell to go there
The "real" half-ogre laboratory is non-existent. All these gnomes and humans got together and thought it would be a great way to generate public interest around a controversial subject so that people would pay it some attention and then they could slip in a few well-placed advertisements about their new technological gadgetry when the time was right. It works on the same principle as the tabloids, or that old TV show "The X-files"; the Siamese twins were wrapped up in it for the sensation. The phenomenon is widely thought to be "underground" when it's actually pop culture that everyone is familiar with. I'm sure that there are "adventurers" running all over Arcanum carrying Siamese twin skulls, the remains of five-assed monkeys, two-headed Vendigrothian bovine spines, thirteen-toed cat's paws, and Zimbabwean tree trouts, all of them trying to solve "the mystery". They're just messengers in an advertising campaign. Everyone knows that little baby half-ogres are made when a mommy half-ogre and a daddy half-ogre love each other very much and then they plant a patch of cabbage that eventually results in a litter of little baby half-ogres.
Where do we get half-ogres to begin with then? Are you going to tell me that Velorien planted the first cabbage patch of half-ogres?
That possibility is discussed in the manual, however, they also bring up two points. The first is that a human is unlikely to survive the rape of an ogre. The second is that once the ogre has fulfilled one appetite, he is likely to fulfill another. The manual goes on to say that if it weren't for the presence of half-ogres in society, most scientists would deem their existence impossible. All of this sets the stage for a lab like the one on half-ogre island to exist. I wrote all that using my memory of the manual, if it's wrong, I'm sorry.