If you're not concerned with break ins, you might consider a bay of windows on the South. A bit of solar heating helps a lot in the Winter; especially when you don't have any heat in the building. My shop doesn't, and it's always about 15 degrees warmer than the outside temperature(it's insulated) in the Winter.
You got cedars, you got water. Now just find it. I would witch the place first and mark where the water is, then build near it but not right on top of it.