Timothy was right when he told Phillip that he thought the cay on which they were stranded was somewhere near the Devil's Mouth.
"... Debil's Mout'. 'Tis a U-shaped ting, wid dese sharp coral banks on either side, runnin' maybe forty, fifty mile..."
... It sounded bad. (Chapter 7)
The little island that Phillip and Timothy discovered was just one of many cays that were surrounded on all sides by "hombug" banks. These banks cut the islands off from navigation by ships, assuring that all but the smallest boats could not enter. The exact location of the Devil's Mouth is never specified in the novel, but according to one source, it is located
"... between Guatemala and San Salvador in an immense natural grotto, called by the fishermen the Devil's Mouth..."
This location is a possibility, since Phillip and Timothy's ship was sunk soon after leaving Panama. Other Devil's Mouth locations can be found in Aruba and the Dominican Republic, but neither is the likely spot where they were stranded.
In The Cay by Theodore Taylor, Phillip and his mother are leaving for Miami and on to Norfolk, their hometown in America. They are leaving because Curacao, where Phillip's father works on a refinery, is no longer safe. The ship will sail to Colon at the entrance to the Panama Canal first to make a delivery of four pumps. It is 1942, and it is war time. The ship they are traveling on is torpedoed. Phillip and his mother scramble to make their way to the lifeboats, but the boat tips and after several hours in the water, there is no sign of Phillip's mother. There is only Timothy, whom Phillip describes as "a huge, very old Negro."
An unlikely friendship develops between Phillip and Timothy as they try to survive their ordeal on a small raft. Timothy tries to reassure Phillip and they continue to drift. Phillip is nagged by an ever-increasing headache and in chapter four, we wakes up blind. He is now completely dependent on Timothy. At the end of chapter six, Timothy spots an island and they are both much relieved when they feel the grains of sand beneath their feet, although Phillip wonders if a deserted island is any better than a raft. He would have preferred to stay on the raft, hopeful of rescue from the Navy.
However, rescue still eludes them and Timothy has to admit that he is concerned that the cay where they are stranded might be cut off from the rest of the sea by sandbanks. Phillip is terrified that they are now trapped and can never be rescued, especially when Timothy goes on to describe "Devil's Mouth," which is u-shaped and has sharp, coral banks running along its side for forty or fifty miles. Timothy is hoping that they are not in Devil's Mouth. Their only option is to make a "fire pile" and hope that they are spotted by a plane.
The Devil's Mouth is a large seris of coral reefs that surround many small cays. It is treacherous for ships and fishing boats so the small islands are not easily navigated.