My roomate managed to find this glitch in the MoM that I'd never seen before - very strange, but actually came in handy.
Essentially, his starting city was on top of a magic node. This meant he couldn't move troops onto the city (troops he built there seemed to be OK) without starting a battle with the node's guardians. We never found out what would happen if he was attacked (would the guardians defend his city? would they ignore attackers unless his city was taken over, and then defend themselves? or would the game just crash...) since he beat the node and took it over (as seen in the screenshot)
...except I can't post a picture directly and my ftp is full. eh - you get the idea. Funny story, amusing quirk.
Node City
Interesting question....
There are a few save game editors to see what will happen. Change the coordinates of the city to a node and let us know what happens.