Very nice idea! 
If I may give a suggestion, I just think that having to pay extra resources, no matter how much, is just not fair for a final spell. Perhaps that upgrade you're talking about could simply appear after unlocking the spell.
Agree, this definitely polished this idea, reasonable thinking, thank you.
This is strange. So We will have Earth Hammer in own fortress but Hammer makes earthquakes on the other side of the map. 
Yes this is strange, I admit, but it isn't impossible. I will try to explain you from
physical aspect.
An earthquake is what happens when two blocks of the earth suddenly slip past one another. The surface where they slip is called the fault or fault plane. The location below the earth’s surface where the earthquake starts is called the hypocenter, and the location directly above it on the surface of the earth is called the epicenter.
Point is that you can (theoretically) with those smaller vibrations from your base to cause that movement of earth blocks, so you can induce earthquake at some locations.
Other words, when earth hammer falls at main base, it delivers a lot of energy to the ground, that energy is absorb by ground, but there is induction of vibrations (waves). When those vibrations come to unstable place, they induce that "slip" and earthquake starts at that "unstable" location in ground. Point is that I tried to explain idea, it is possible theoretically, but catch is that in real time could be only possible to induce on unstable ground, on ground where exists possibility for earthquake. In game is idea to induce earthquake on every point on map, that is only problem. We could blind on eye and tell, that are dwarves, they as Durin's folk (stone masters), they know how to overcome that problem.
So it is possible (theoretically!), I know it sounds strange, I tried to explain idea in general.
I think that it is better to summon this Earth Hammer in earthquakes spell. He will make earthquakes around him and disappears.
Well, that is not bad idea. Tiberius had some similar idea with earth shaker. Main reason why I think it is bad is because of graphic. Imagine you selected epicenter for earthquake power to enemy citadel position. There will be some kind of graphic overlap between Earth hammer and enemy building. That is reason I think this isn't good idea.
I think it is very reasonable, there is of course greater chance to induce earthquake this way, but that graphic overlap is something which concerns me.
I agree with TIenity!It is simply not logical to ahve such device and there is no way that it can do such damage from your fortress! I like the idea of Earth Hammer in the Spell but no the part with the Fortress! It shold simply appear make the Earthqueke and dissappear!
I tried to explain why I think this is bad idea about summoning hammer on place of earthquake, I don't say it is bad in general, only that graphic overlap is something very bad.
And logic of my idea, I explained above.
