I wholeheartedly approve of this topic.
I think just having a human city and trying to build a Fortress underneath it would be a good start for a mod/conversion. Make sure that a large human settlement can be genned (with a desire to build at least one taaaaaaall building i.e. Tower of Art), add/remove certain races and change current species' beliefs, mess with the Gods they all belive in (Anoia, Om, etc) and demons from the HFS Dungeon Dimensions. Don't forget the Ankh! I don't THINK you can have toxic rivers in DF (would be interesting) but a nice large one with no fish would be suitable. Aquifier or not? Possibly not worth the hassle, even though in the books, the dwarfs DID have to get a lot of flood-precautions.
Under all this, try to get a fort going with:
A steady flow of immigrants
Quite a lot of starting wealth
Every dwarf with at least Novice skill in mining
Loam/sand for a loooong way down, maybe dotted with some rich Treacle veins
Occaisonal invasions from the Watch? Make them a seperate race who ally with humans but not Dwarfs
Otherwise, I don't see how any real invasion would just be repelled by the humans. Maybe just make some Dark Deep Dwarfs who are opposed to you surface-going scum, who are allies with the humans just to prevent confusion.