http://www.gamesas.com/topic/1477655-musings-on-the-scale-of-tamriel (please read page 8 for the latest updates)

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This is a very common misconception. The famous map of Yokuda comes from the game Redguard, and depicts it as it is in the late 2nd era. Between that, the fact that actual Yokudans are featured in the game, the Anvil quote you mentioned, and Cyrus visiting the landmass in CvV, it is very clear that the island chain still remains. The continent is always just described as being a continent prior to that, with absolutely no reason to believe it looked anything like the island chain that it became after its destruction.