Karen, Lost Horizon is hard to find now, unfortunately. I do wish GOG would get it as well as other Animation Arts games. You can order it through Amazon, either as a download -
http://www.amazon.com/Deep-Silver-40435L...ds=lost+horizon (not sure what the DRM is like there) - or as a physical copy, if you're willing to buy from a seller -
http://www.amazon.com/Lost-Horizon-PC-uk...s=lost+horizon. I got mine years ago from Interact, which sadly is not around anymore.
The Book of Unwritten Tales is very good, and I think you would like it a lot since you listed King's Quest as your favorite series. The game seems to me to have elements from both Sierra (the fantasy setting and fantastical feeling) and Lucas Arts (the quirky humor), so it almost feels like a nice combination of the two. I definitely recommend it. The prequel, Critter Chronicles, is also very good, though shorter and more limited in scope. The sequel, which is coming out in episodes now, is also strong and up there with the first. The last episode should be out this month, and hopefully GOG will get it then as well.
Jenny has a very nice list for you here, and I second Memoria (and its prequel, The Dark Eye: Chains of Satinav). As a King's Quest fan myself, they felt very much like modern King's Quest games, though with a more melancholic feel. Night of the Rabbit is another nice fantasy setting game and extremely charming. Cognition is darker, and many have compared it to GK (though, to me, it feels more similar to Still Life) and is really fantastic with a strong story and puzzles.
Like Rushes, I also really enjoyed Moebius, and it's a Jane Jensen game.
http://www.gog.com/game/moebiusAlso, I can't help but mention my personal favorite, Dreamfall Chapters. I'm not sure if you're a Longest Journey/Dreamfall fan or not, but if you are, I strongly recommend this game. Even if you didn't like Dreamfall as much due to the action, they take that out of the equation in Chapters. The controls are still similar to Dreamfall,
however you can use the mouse instead of the keyboard. Hold the right mouse down to move your character forward, and the mouse itself to change camera direction. Thorsgoats, who hated the Dreamfall controls even though he put up with them, found using the mouse in Chapters far easier. The story and writing are both excellent so far. Only episode one is out now, but episode two should be out fairly soon - I'm guessing the end of this month, or more likely, next month - and it's available on GOG. Season pass -
http://www.gog.com/game/dreamfall_chapters_season_pass. Season pass with extras -
http://www.gog.com/game/dreamfall_chapters_season_pass_special_edition.Since you mentioned Sherlock Holmes, have you played Crimes and Punishments yet? Unfortunately, it's only available on Steam. I haven't tried it myself yet, but from what I've seen it has beautiful graphics and allows you the ability to make your own deductions.
EDIT: Another nice fantasy type game you may enjoy is The Whispered World -
http://www.gog.com/game/the_whispered_world_special_edition. Its sequel is also supposed to come out sometime this year.
EDIT 2: Another great Jane Jensen game, just in case you missed it, is Gray Matter. I liked that one even more than Moebius.
http://www.gog.com/game/gray_matter