I actually don't think making any major changes to Zilargo is at all necessary. I do like the paranoia and intrigue of the urban areas, although I presume that outside of the cities in the rural farmlands and whatever, that life is not like that all, but rather pleasant and relaxed. Not unlike a Pieter Bruegel the Elder peasant wedding painting, I guess maybe you could say. The urban stuff kind of reminds of the Dutch Age of Empire too, with corporatized groups like the Dutch East India Company being a good analog for the para-governmental groups that seem to run Zilargo.
Of course, Zilargo in Eberron is defined primarily by the gnomes, and I don't have gnomes. I've substituted the Hyperborean race here, although the Hyperboreans don't really seem to be cursed in any meaningful way if they live in the relatively pleasant lands of Zilargo, other than that they are exiles from many generations ago when they used to live in Lomar and Zobna.
Heck, I don't even see a reason to significantly alter the racial percentages for Remixed Zilargo. Then again, Zilargo as printed doesn't offer a ton of things to do; it's a nice place to go shopping for... a ship, I guess? It's a nice place to do some research, maybe, or to meet for some kind of diplomatic conference, or something. The adventuring that happens in Zilargo is going to often be indirect and subtle, and the threats are more likely not coming from Zilargo, even if they happen to be in Zilargo when encountered. Given that that was the case already, the only way to change that would be to fundamentally change the nature of Zilargo, which I'm not going to do.
And keep in mind that I've envisioned a different kind of "racial personality" for the Hyperboreans than the gnomes of Zilargo tend to have; a fair bit more serious, reserved and aloof rather than friendly and curious with outsiders.
Zilargo population remixed:
50% Hyperboreans
35% Human (mostly Brelish and Mrorish)
7% Goblins
8% Other