Where is the speaker when he or she hears lake water lapping?

According to the author of this poem, William Butler Yeats, this poem is autobiographical, so we know the speaker is the poet himself. Yeats explained that when he was in his early twenties, he was on a sidewalk in London when he passed by a shop that had a display containing a jet of water that squirted up and balanced a little ball on top of the water stream. The sound of running water reminded him of time in his childhood that he spent in County Sligo in Ireland by the shores of a beautiful lake there, Lough Gill. That incident was his inspiration for writing the poem.

In the text of the poem, the speaker says that when he is "on the roadway, or on the pavements gray," he hears in his imagination the sound of the waves gently coming in to shore. To most Americans, this sounds like the speaker is on a paved street. However, in British usage, as well as in some Atlantic states in the U.S., "pavement" means "sidewalk." You may be familiar with the idiom "to pound the pavement," which means to walk from business to business searching for sales or employment, usually on a sidewalk. 

The fact that the speaker hears the "lake water lapping" even though he is in the city and far from the lakeside country that he misses emphasizes the speaker's intense longing for his isolated island retreat. The speaker would no doubt be able to hear the "low sounds by the shore" no matter what his location was because the desire to go there was so entrenched within him that he could "hear it in the deep heart's core."