So note that the following is speculation, I can't find a current floor plan of the terminal building-- the most recent one I can find has International and Domestic still as separate buildings. When the terminals were renovated, the old Ansett Golden Wing lounge was removed, so that is no longer an option.
I currently think there are two options here. Not sure how palatable each is.
The first is that Federal Group stop using the International Terminal[1] lounge space ("Saffire" Lounge) for their $1500/night hotel guests, and turn that into the new Virgin lounge. That location has the nice advantage of fronting the apron, so you could run a dedicated security line inside the lounge, and have a separate gate operating out of the lounge (given that Virgin only ever uses one at a time in HBA). If you couldn't have dedicated security, it would be the single worst lounge location imaginable (there won't be priority security, and it's ~2 mins walk to the end of the line.
The second is that a combination of the "car raffle" area in the check-in hall, and the airside souvenir shop near the VA gates get converted into a lounge. It strikes me that that area in the check-in hall is sitting rather idly, and could be converted quite easily. Alternatively, there may be a bit of extra space next to the baggage screening facility, but I've no idea how big that actually is. This would be an airside lounge, which would be nice.
Thoughts?
[1] we have flights to Antarctica, OK?