Far Cry is by far the best engine for creating an island map. Source (which encompasses Half-Life 2 and Counter-Strike Source) is probably one of the worst you could use, with Doom 3 being pretty much the only one that could be worse. To save myself from explaining, I'll put them into a basic order:
Crytek Engine (Far Cry)
Designed specifically for creating lush, beautiful outdoor scenes. Also designed specifically for creating islands, although you can import 3D architecture in from other editors (including 3D Studio Max and Maya as far as I'm aware). The editor itself is a "sandbox" editor, in that you modify it in real time and can immediately test it. Terrain height adjustment is almost like painting.
Unreal Technology Engine (Unreal Tournament, Tribes Vengeance, many more)
A large focus on outdoor areas, but also has strong support for detailed indoor areas. Is a good compromise between indoor and outdoors, but has the huge disadvantage of having the hardest to use editor of any engine ever pretty much.
Source Engine (Half-Life 2, Counter-Strike Source)
Is focused more towards strictly geometric designs, making it ideal for cities and indoor areas. Making believable terrain with this engine, especially an island, is not impossible. However, it will not look anywhere near as good as the Far Cry engine because its lighting is simply more optimized for indoor areas and it will look fairly flat. Creating smooth terrain and such is also a huge chore with this editor, which is essentially still Half-Life 1's worldcraft (which is in turn derived from Quake) with a few extra additions. You are, however, guaranteed more exposure from the community and Valve themselves if you mod for Source. Huge downside is long compile times (think of it as rendering, except without real-time previewing as it does so).
Doom Engine (Doom 3, Quake 4)
Tailored specifically towards creating highly detailed and realistic lighting indoors. This is probably the worst engine you could hope to use when creating a believable outdoor area, and also has an incredibly weak multiplayer community which means that your mod is unlikely to receive much exposure.
Hopefully that sums up the pros and cons of using each engine.
In my personal opinion, I thoroughly agree with Alien in saying that Far Cry is the best engine for this project if you really want to go ahead with it. However.. Half-Life 2 is a newer game and has a more active community, so you may wish to compromise engine suitability for that. Up to you!