Surpirsed no one has answered this already. But I'll try to help.
Hobby Island is indeed gone. ![Sigh [sigh]](/emoticons/icon_smile_sigh.gif)
The area has yet to recover and I don't know if it ever will. Not much left here now.
There is M & M in Bellaire. Its on Chimney Rock.
Larry's Hobbies on 45 and 1960.
And one other place down in the Rice Village but I can't remember the name at the moment. I am at work. Sorry.
There is or was a HobbyTown on Highway 6 South.
Both Larry's and the place in Rice Village are both mainly railroading. M & M is mainly RC stuff. The HobbyTown had a little bit of everything but seemed to more bent towards little kid games. Not sure if it is even there anymore.
I think all the shops in Houston are mainly RC or Train shops now with some with just a little plastic. The plastic side of the hobby here in Houston is hurting real bad. If there is anything else I do not know of it and I would love to know if I miss some place.
Hope this helps.