I do audio post production/sound design. I'm located in the NY Tristate area, and yet two of my best, and most fun, projects have been done via the internet and FedEx. One was a short that was shot in London, the director lives and edited in L.A. and the composer was in Boston; I never met either one face to face. The director of my current feature project is in Virginia and the composer is in the UK.
So your location is not as important as your talent and connections. I did sound design for a network cartoon because I maintained contact with a former bandmate. I've picked up a number of projects as referrals from other clients. I work as a pre-production audio consultant and do some location sound as well. I've also been doing some simple editing, mostly setting pictures and video to music (video yearbooks and the like), so don't lock yourself into "this is all I do".
It's very difficult to become the biggest fish in the ocean, but if you're talented and work hard you can become the biggest fish in your local pond. The experience and reputation you gain can give you what you need to survive if you ever decide to migrate in the ocean.