I did an erupting volcano cake a while ago. All my kids loved it.
Here is the link
http://www.disk-o.com/disk-o10/recipekorner.html
I do have one suggestion. I think you should raise the cake up at least a half inch up off the plate so the cake doesn't get soggy.

What a great idea! I did a volcano cake that I used dry ice to make it smoke. I poured red-orange frosting down the sides to make it look like lava. I'll have to try this lava!