Unless I just can't find it, but isn't there supposed to be a major city called Camlorn in Daggerfall? And isn't there a kingdom of Camlorn too? Why isn't it in the game, it's mentioned many times in-game isn't it?

Mistake, did it not exist, was it called something else...? :confused:

http://www.uesp.net/wiki/Lore:Camlorn

Cross referencing some maps, it looks like Camlorn is either in Ykalon or just West-ish of it, off the map.

Yeah, Camlorn is just off the top of the Daggerfall map, basically. So it's close enough for various mentions, but not enough to actually be visitable. Shame, but, eh, you get enough places to visit in that game already.