Here's a mod titled Damarask.
Oblivion's daedric architects certainly can be admired for the grand scale of their creations, and their fanatical dedication to the humble bloodied spike, but they seem to have a bit of a disdain for practicalities. Thirty-storey-tall towers covered in pointy bits are very impressive and all, but when you just fill them with a bunch of spiral staircases and maybe a spike lift and nothing else, you have to wonder if maybe they aren't wasting a teensey bit of space and effort.
But far beyond those assault gates and their lifeless towers lie the Dremora clans of Dagon, and their cities and towns built to honour their lord. On a small volcanic island in the fiery seas of Dagon's plane of Oblivion sits the city of Damarask, the capital of the Taloned Claw Clan. The warriors train for endless clan warfare, the churls grind the machinery of commerce and industry, and the slaves scream their last on Dagon's altar. And in the halls of power, the dremora lords scheme tirelessly against the other clans, and against each other.
So when a despised yet powerful mortal is brought into this volatile mixture of honour and treachery, the wise dremora will see the opportunity inherent in such a pawn...
This mod contains a complete Dremora city in the Oblivion planes, complete with an extensive questline.
The city contains: a number of private residences, a council hall/museum, a smithy, an alchemist's, a xivilai ice mage's dwelling, an arena/bloodworks, a temple to Dagon, a bar, guard towers, a barracks, the home of a particularly unhinged individual, slave caverns, and a massive apartment-type building. There's 50-odd NPCs, with AI schedules and a fair amount of unique dialogue (all unvoiced). There's a separate and ruthless criminal justice system. And there's ten quests, as well as a large number of fights in the pit of the Damarask arena.
Oh, and there's NO voice acting. I'm not really a fan of voice acting generally and I really don't like the dremora cookie-monster-death-metal voices.
To start on your journey towards the city, you need 10 infamy and you need to walk the road north of Leyawiin (almost to Water's Edge). To get 10 infamy without earning it (shame!), type "SetPCInfamy 10" in the console.
You can now also go straight to the town by typing "coc damaraskstart" in the console, but some of the dialogue etc may not make sense, and there may be some errors, if you haven't done the starting quests.
If you want to embark on the questline or the arena battles, I recommend a level of above 20; there are some quite difficult battles and opponents. And save often! It is possible to fail some of the quests, and the dremora do not take kindly to failures.