Elf Sternberg

Also worth investigating is the D&D setting Iron Kingdoms, from Privateer Press. I'm not exactly clear on whether the D&D setting or the painted miniature wargame came first, but it contains many great takes on the crossover between magic and mecha. It even has a version of goblins taking over the role of the gnomes you mentioned. I haven't read any of the novels from this setting yet, but the setting itself sounds like what you're looking for.