Visited 13th March 2003: I've regularly stopped to look at Pen-y-Castell Hillfort from the road, but you have to get a lot closer to see the standing stone (north east of the fort). The stone is local gritstone, small and squat, with an angular shape to it.
The people who erected it may well have chosen the site because of the distinctive hill nearby (later fortified) and the stream running to the south of it (Afon Stewi). The stone sits on flat ground, and is well positioned to be seen by anyone travelling along the valley between the sea and the Pumlumon area.
The two peaks of Disgwylfa Fâch and Disgwylfa Fawr to the east are very striking viewed from the coast, and may have had some significance as a symbolic gateway into the mountains. If this was the case then one of the routes towards this gateway would have taken people up the Stewi valley, past Pen-y-Castell, and the distinctive landmark of the hill. It makes sense for a stone to be erected here.
Back in the 21st Century, a public footpath runs between the stone and the hillfort, close enough for there to be no problem going right up to the stone. It's also marked on the Landranger, which is handy.