Dangit, Jim, I'm an Artist, Not a Geographer

[Schyzm]

Unfortunately it's a low-fantasy setting so I can't throw magic at all my problems, and the original settlers would have died before any sort of engineering feat could have been made workable.

I appear to have painted myself into a corner here, haven't I?

In a lot of ways you're in a corner, but only if you want to isolate this area geographically in this specific way.
for low-magic, low technology worlds, mountains on some sides, impassible deserts and extremely rough/northern (iceberg choked) seas would do the trick, and still allow for a legitimate hydrological cycle.