Can you post a screenshot and/or save game of this happening?
The natural wonders should be impassable, and I'd say you don't want to construct your observatory on top of a geyser. Based on what you say, possibly it just checks whether it's a mountain field without checking whether it's a natural wonder, which would be a nono.
That should be hill ofcourse. Perhaps the observatory is meant to observe the geyser?
The real question is why it´s listed as a Natural Wonder (and not, say, the Grand Canyon). And if you put Krakatoa as a natural wonder, why not Mt Helens? (I´m sure the witnesses to the eruption of both were marvelling at this ´natural wonder´...)
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