Well it took a little longer then I anticipated but here it is

Questions:
Armor name?Skuld's fire (not that sure though)
Where is that guy? In some giant demon guys (that i have yet to name) empire in the clouds (dark clouds). He is standing on massive dark cloud miles in the sky. The reason he is not falling through is because of some spell/enchant/trinketmobob that i have also yet to name. This place he is in would be the whole theme around the armor, basically a full fledged expansion of dark cloud empire vs Midgard with some good normal cloud guys in between, it would sound better if I explained it more.
Whats with the sword?Its just a tag along weapon that would be found near it.
Lava coming out of the clouds?Turns out there's some lava in these clouds that shoots up and also rains down below. The catalyst for the whole conflict of this story would be this cloud drifting over a part of Midgard raining down lava and blocking out the sun to that part, maybe a city or 2 would go down to show the severity of the situation.
But if you were there in game running through as a lower level you could get blasted by them erupting randomly. Only with a special "item" the high levels in the zone get can you see and predict the lava eruptions.
What about the darkness/black looking fire coming out of his right hand?Just a spell that would also tag along with the armor with a little lore. It is the signature black flame of the ancient warrior Skuld, also just looks plain awesome looking.
Giant Eyes in the backround?Thats the giant demon lord of the dark cloud empire
Hes a few thousand feet high so he can bee seen from pretty far away. You won't probably ever be able to see his whole body even with a boss fight.