Hippogriff will go behind Shrek and closer to Waterworld. In the photos, its kind of the blank area of dirt which sits today.
If I were to guess and "assume" where a Diagon Alley could go at USH.... I would say Prop Plaza and Tram Loading of Area 2. Build Gringotts into the hillside similar to BTTF and lay a huge slab of concrete similar to the Frankenstein Parking Lot to level the ground. Hey, its been done before!!!
Imagine if we had the complete Harry Potter experience in only one park! Nuts! But I agree, this more than likely will never happen. USH is bound to always get the short end of the stick.
Lets rebuild our main gate entrance first to accommodate all the chaos WWoHP will bring in 2 years!