We head northeast from Zhongdian on the dusty, pockmarked main road, dipping left and right to avoid the more outrageously oversized potholes. Soon the road narrows. One side sheers away as we curl around and up the mountainside, plummeting further down as we drive, until just peering out of the window becomes a sickening thrill.

Any terror caused by staring into the shifting abyss beyond the LR3's wheels is compensated for by the astonishing views. Monstrous peaks loom over us, only to sweep out, time and again, into banks of snow-capped rock so huge and perfect, they appear utterly unreal. By the time we reach the flapping prayer flags of the Hongla Pass at 15,700 feet, the scale and beauty of the landscape has reached such outrageous levels that there seems no point in exclamation.

We drive for two days through streams of water, jagged mud trails, ice and ankle-deep snow, and then back to dusty potholes. We shift between extremes in a matter of yards: the "ping" of the LR3's Terrain Response system as it shifts settings becomes a familiar punctuation of our journey. At the end of a full two days, we've covered 170 miles.

And where exactly are we headed? Well, we've been directed to a nature reserve called Yading in the southwest Szechuan province. Rock explored this region. He described it as a bandit-ridden, dangerous place, but one of unsurpassed beauty. What Peter Klika found here bore remarkable similarities to Hilton's Shangri-La. It might just be the place we've been looking for. As we climb the last series of peaks leading to our destination, darkness is falling, but the anticipation in the car is rising. Come on, I think to myself—this has to be it.

We round the final corner and the glory of Yading opens out before us. Or at least it would, if it weren't shrouded in a thick, soupy mist. Squinting into the semi-darkness, we can discern the outlines of some peaks, and Jason tells us there is a monastery in the valley. But, in truth, it looks no different from any other mountain range we have crossed. Disappointment hits me like a damp thud in the chest.

There's nothing we can do but retire for the night in the only kind of guest accommodation Yading has to offer—a very basic Tibetan homestay, with rooms separated by plywood and plastic sheeting, no running water, no heating, and no bathroom beyond an evil-smelling hole in the floor. In Lost Horizon, Hilton's protagonists marveled at the modern conveniences available in Shangri-La, from porcelain bathtubs to central heating and flushable toilets. I'm reminded of this as I settle in for a long, freezing night, pinned down by layers of bedding and trying to cover as much flesh as possible without actually suffocating. This, I huff to myself as sleep closes in, is not my idea of Shangri-La.

Next morning, I pile on as many clothes as will allow free movement and head grumpily into the face-slap of a bitterly cold morning.

I am met by paradise. The view that last night was obscured now sits perfect and radiant before me. The snow-capped conical peak of Chenrezi looms large over a lush green valley, and the golden roof of Chonggu monastery winks at me in the early morning light. I stare, elated beyond reason. This is amazing. It is as if Hilton stood here and wrote Lost Horizon based on what he saw. And yet—I think to myself as the rising sun illuminates more of the valley's wild sweep—no words in a book can do justice to this. If Hilton somehow did borrow this view to create Shangri-La, then his descriptions, however beautiful, are inadequate—as are mine.

The climb up to the monastery takes 40 minutes on foot. Here's a handy tip: Should you ever wish to induce light-headedness, nausea and general lung-burning agony at a moment's notice, try walking uphill through snow at an altitude of 12,800 feet. It will do the trick every time. In view of this, we are beyond pleased when a group of horsewomen with Tibetan ponies takes pity on us and carries us the rest of the way on horseback. I sit back (ignoring the fact that a woman at least 40 years my senior is leading my horse up the hill) and enjoy the view.

This area is not simply beautiful—it is also one of the most sacred places on earth for Buddhists because it's the home of three holy mountains: Chenrezi, the deity of compassion, Chenadorje, the deity of power, and Jambeyang, the deity of wisdom. The odd little settlement we find at the top of the hill is dotted with "mani piles" of inscribed stones left by the thousands of pilgrims who visit each year, and is streaked through with strings of brightly colored prayer flags.

A small café sits in the middle of this colorful web. It's run by a monk called Gyaltsen Lochuo, who is dressed today in his traditional Buddhist cowboy hat and tracksuit top. He seems bemused by our search. "Lots of people say this is Shangri-La," he says. "I have heard of this British book, but I think Shangri-La is just another word for Shambhala." This, he tells us, is a mystical kingdom which Buddhist teachings say is located somewhere in the northern Himalayas. He shuffles inside, re-emerging with plates of greasy fried rice. "Shambhala doesn't exist on earth," he adds, doling out chopsticks. "It's on another plane." So, is it possible to ever find this paradise, whether Shangri-La or Shambhala? "No," he says, "but it's possible to get an idea of it. And this is the closest I've found."

On and up we go, to the towering peak of Jambeyang, to the beautiful, preposterously green Pearl Lake. And something strikes me as strange. Of all the places we've seen, Yading has by far the strongest claim on the title of Shangri-La; yet, refreshingly, the spiritual import of this place means there has been no interest in promoting the fact. There's no attempt to commodify the Tibetan culture here, to make it digestible to attract the tourist dollar. Not yet, that is. But things may soon change. There's talk of an airport opening soon in nearby Daocheng, and China is already pouring resources into tourism development in the region.

Meanwhile, the plot thickens. Yading, we discover, is rich in rare flora and wildlife, as is Shangri-La. Yading abounds with minerals and gold, as does Shangri-La. By the time we get to the Chonggu monastery on the hill, the similarities are mounting high. Then, a friendly resident monk I'm chatting to nearly gets a full-face spray of my yak butter tea.

Before I tell you this, you need to know that in Lost Horizon, the diet and air of Shangri-La shields the monks from sickness and promotes unnaturally long lives. At Yading, the monk tells me, pilgrims often come with illnesses, and when they perform a circuit or "kora" of the holy mountain, they are cured! "Then," he says, "many of the pilgrims decide to stay here and live." The yak butter tea suddenly threatens to find its way out of my nose…. A famous feature of Shangri-La is that visitors are compelled to remain. The monk seems amused by my reaction, but come on—we really have wandered into the realms of the uncanny here.

The sun begins to set, slowly turning the edge of Chenrezi's peak from linen white to a gentle amber. I sit down in the lee of a large mani pile to drink in the spectacle, and a thousand prayer flags snap in the wind.

Yading is alarmingly close to Hilton's Shangri-La. But it's not exactly the same. There's no Spring of Eternal Life here, no creepy 200-year-old monks. But then, you're never really going to find the exact place, are you? It's fictional, after all. And it's worth remembering that the defining characteristic of Shangri-La is that it is lost, so the very act of finding a place means it is not actually Shangri-La—a discouraging revelation for the ranks of Shangri-La hunters, but it makes sense.

At the end of our quest, what we have found instead is a place that is stunningly beautiful, spiritual and still. It may not be exactly what Hilton envisaged in his novel, but as I watch the peak in the distance dissolve into dusky lavender, I'm inclined to think the reality around me is about as close to an earthly paradise as I'll ever find and it doesn't need fiction to improve it.