I'm not too crazy about the simple movie approach, nor the Skull Island idea, because they don't really have an intrinsic value large enough to encompass what it means to have a theme park (or in this case, a water park, though that makes no difference).
I, however, agree that the LC theme would not fit completely within the storyline, so something along the lines of a forgotten island off the coasts of Port of Entry's island would work, and would allow for Universal Creative's gift of original ideas (like we saw with LC) to flourish once more. Of course, it wouldn't be connected to IOA, but its story would be connected with IOA's. Implementing a storyline for the RPR would make the deal work out even better.
What I envision is somewhat along the lines of Blizzard Beach's layout: a strong weenie with subsections around it. The island's theme could revolve around the forces that created both it and the island on which the village (later named Port of Entry) was built with the lighthouse that later shined specifically only on the village island (remember that the other islands in IOA were created from a little ghost girl's red pebble, so they came afterwards), therefore resulting in the other island remaining undiscovered until now, having playful waterfalls and slippery rocks and whatnot, but also having a deep secret held deep within the mountain (guests would enter through a cave and access the mountain's waterfalls and everything from there with the use of open elevators, but would then be lured in deeper only to discover a dark ride (AquaTrax) that helps rid the island once and for all from the evil forces within).