Lava can be found in the lava river near the love shack, where the lava is converging right before it meets the ocean.
Below the bridge going over the lava flow there is a green teardrop-shaped island surrounded by the lava. Below the green teardrop island is a smaller, dark grey, circular island. That smaller island is where you can gather the lava resource.
There is a large round rock towards the end of the lava stream in the bottom left corner of the map. Drop a villager at the bottom tip of the big rock where the two streams join up again to collect the lava.