So over the past few days I have been thinking about the different possibilities, where is it etc.

My theory is that zanarkand is located near the baaj temple which is far out at sea.
Jecht was out at sea when he dissapeared which probably means that he swam into sin and was transported across the world.
Tidus is transported aswell but to the baaj temple and rikku picks him up from the baaj temple and then they are out at sea when sin comes it is highly possible that they were near dream zanarkand at this point.