Turning circles, loops and islands
I understand your frustration at wanting to map looped ends of roads, but I don't think using traffic_calming=island is the way to do it. An island like that is a specific feature designed to slow cars down on streets where fast traffic is a hazard.
I've mapped turning loops at the end of roads as loops of road, rather than trying to describe the island in the middle. Here's one I did: http://osm.org/go/eurTZ4Qdc-- . Unless there's something particularly funky about the island, I think adding the road loop is the best way of mapping them. It renders nicely, allows routing applications to know what's going on and doesn't misuse any tags.