On the map of the Myth world, we can see Stoneheim clearly inside a mountain range (I vividly remember one of my newbie opinions that Stoneheim was larger than Myrgard because it had a little pointed roof, making it appear larger than Myrgard, until I realized that "roof" was a large mountain's peak behind it).
Whether or not the intentional collapse of the barbican closed off 10,000 dwarves inside a valley or inside caves, it was clearly a measure taken to prevent an invasion. Although it wasn't a successful move, considering that "victuals" stli. And that theory about Dwarves using space-magics to supply their infinite bottle backpacks seems perfectly plausible to me (we know that stock Dwarves can repair world knots, why wouldn't more accomplished dwarves be able to supply fellow troops on the field with bottles via the same or similar magic?).
Although I have no real opinion yet about the underground/aboveground city debate, I can't forget that in the Balin levels of TFL, we see many caves occupied rather than cities.
-Welly
