The animals would probably die/migrate because herbivores would not have anything to eat. Birds would probably fly over the area now and then and insects would probably live in the dead trees. The insects could attract some bug-eaters to the area when their eggs hatch. But generally hardly any animals would live there.

It does have some magic, but I'm not sure to what extent yet. It's an intriguing idea that I might look into, though! Dragonfire could perhaps have this effect also (in case it turns out my world has dragons). Thanks for the inspiration :)

Yes a natural reason. Besides, I'm not even sure if a toxic waste deposit would be realistic in a world with only medieval tech?

I will look into the black basalt, it could make for some interesting settings.

This is a great and well written answer, thanks!

The distances used in the answers below are fine, thanks for your help guys!