Ultima VII: Forge of Virtue/Walkthrough

The Isle of Fire subquest can only be accessed if you have the Forge of Virtue add-on disk. Most of the newer editions of the game (The Complete Ultima VII, Ultima Collection, etc.) include the addon.

How to get to the Isle of Fire
At the time when you start the game, there will be tremors. Iolo comments that maybe Lord British knows what's the reason behind them.

When you talk to Lord British, it turns out he does know the reason: Isle of Fire has recently risen from the depths of the sea. He gives you deed to his ship, the Golden Ankh, as well as a magic crystal.

The Golden Ankh is anchored on the Vesper pier. Be sure to check the ship's hold, it also has a lot of helpful stuff.

Once you sail south from Vesper, you see more of the unstable islands - obviously, they're not on the map, but they're under the band of text. Circle the biggest island to south side, and sail north through one of the narrow gaps. You end up in a cove where you can drop the anchor. Once beached, head north to the Castle of Fire.