Shortly after finding the funeral procession road, I found the village of Dafnai nearby. I was on the right track by checking the general area, but I also had to really delve deep into every scene there was in the episode, no matter how brief or how little detail was shown. The mountains in the background weren’t very visible in general – the only help was a very short sequence where Major Krasakis visits the village, and even then I had to piece together the mountain range in the background from a panning shot which was quite time consuming. This is what I came up with.

Now, this may look a mess, but once I’d found the funeral procession into Hamilon, I only had to look at the landscape nearby, and this exact same mountain range appeared. From there it was just a case of moving from street to street or to the next village until I found Dafnai. In this case, it was the next village to the west of Hamilon, called Flamouriana.
Check out the find, it’s on the episode 4 page.