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Odysseus' islands
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Update April 2021
So, Ithaca lies northwest on the outer rim of the group, the rest to the east and south. If we take a look at the current formation of the islands, present day Ithaki doesn't seem to fit the bill in any sense, whereas Lefkada happens to lie northwest on the outer rim of the group, furthest out to sea. Considering this, Lefkada must be ancient Ithaca!

Now, I can hear you thinking, if it were really that simple, why wasn't ancient Ithaca found before? Well, it seems Strabo has a lot to answer for on that score, but we'll get into that more on the following pages. Of course, the name Ithaki, which the inhabitants call Thiaki, doesn't help matters much either.
Ithaca itself lies north in the sea, and is the furthest towards the west. The others lie apart, towards east and south.
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My interpretation of low-lying
As any sailor will tell you, when traveling some distance north the sun's elevation drops. Not only is north 'away from the sun' visually, it also lies lower in relation to south. That must have been the reason the ancient Greek used low-lying to indicate due north.

When interpreting low-lying as north Odysseus words read as follows:

Ithaca
Ithaki
It's time now to introduce you to the key players in the world of locating Ithaca. There are four men worth mentioning, besides Odysseus and Homer, we have Strabo, Dörpfeld, Bittlestone and Goekoop. Let's start with the main 'culprit' Strabo.