Dark Water
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Officially, Dark Water does not exist.
Charts show only dangerous shoals and reefs east of New York. Coast Guard records describe the area as a navigation hazard plagued by bizarre compass failures, unexplained fog banks, and radio interference. Ships that approach too closely simply... turn away. Survivors rarely remember why.
The island itself appears frozen sometime around 1893.
Gas lamps burn every evening. Horse-drawn carriages outnumber automobiles. Telegraph wires hum softly in the mist. The townsfolk dress in Victorian fashions because, to them, the Victorian Era never ended.
The explanation is not magical illusion alone.