When Jyggylag invades the Shivering Isles, the Crystal Obelisks of Order effectively provide portals for the Knights of Order into the realm. But WHERE do they provide portals from? Considering that The Shivering Isles is Jyggylags realm, only twisted into madness, before they are borught into the Isles, the Knights have no realm to be summoned FROM. Does this mean that they are just free-floating around in Oblivion? Or are they somehow contained within the Obelisks, or even within the fabric of the Isles (since the Isles are just an extension of Sheogorath, and Sheogorath is just another form of Jyggylag, and the Knights are just an extension of Jyggylag, thus effectively, the Knights are an extension of Sheogorath, and thus similar to the Isles themselves in that regard)?

It's better to say that both Sheogorath and Jyg are different forms of the Isles. It keeps the container and the actors straight. Otherwise, yeah that's pretty much the idea.

Eh? Which one is pretty much the idea?
The 'part of the Isles' idea, I assume?

Didn't part of Sheogorath's infinite realm brake off though? and it became Jygglyag?

Perhaps Jyggalag had been separated from the Realm a long time ago, in something akin to the Divine Pact, giving birth to mortal life in the Isles. And allowing the life in the Realm to control him. And allowing him to leave the Realm.

I believe that when jyggalag was exiled to be the madgod, he created a new realm parallel to the that of his previous realm where he ruled as the god of order. There by creating two realms altogether, the first of which being the realm of order where the knights can be summoned from via the crystals.

I don't think they're coming from a separate realm: the Madgod's Realm and the Realm of Order are one, just as Sheogorath and Jyggalag are one. The Greymarch is not the invasion of Order from a different realm; it is an outbreak of (latent, suppressed) Order from within.

The Order Crystals are the initial manifestations of this outbreak of Order, and as Order develops, they give rise to the Obelisks, Priests, and Knights. When Order fully manifests itself, Sheogorath himself is restored to his original form of Jyggalag, and Order sweeps all before it (until the Champion succeeded in defeating Jyggalag and arresting the Greymarch). But I think it's basic to an understanding of the Shivering Isles to consider that Order arises from within the Isles, rather than invades from another realm.

Ah ok, yeah I'm still a little foggy with this whole thing hehe, but yeah that makes sense.

They just sprout out of the ground!

No seriously I believe they are entombed in some sort of Vault, or perhaps The Void, waiting for their master to re-emerge once again

You know, it could be that when Jyggy was reawakening, the knights had an opportunity to get back on the isle, like with the fountains for the Golden Saints and Dark Seducers, only using the crystals. Probably helps that the knights of order either are extremely cold and calculating, like their master, or something of the sort, or else the waters of Oblivion would have made them cray-zay.