To setup a lava fountain we used a common principle to simulate fluids. It’s all about physics bodies and adding an emitter to it. It’s so easy with the new built-in emitter editor in Xcode 5 to build a good looking liquid element.
After editting the emitter it just need some circle shaped physics bodies that will float endlessly from some defined point that is the parent node for each emitter. The difficulty is to keep an eye to the performance. The framerate could extremly decrease if a single emitter body isn’t destroyed after a right time…
See by yourself in this litte demo video.