Abu Hurairah reports that the Prophet sallahu aliye wasalam - has said, "It has been permitted for me to speak of an angel whose feet is in the seventh earth, and whose shoulder holds the Arsh(Throne), and who says (praising Allah) , 'Subhanak ayna kunt wa ayna takun, (meaning: Glorified are you (O Allah) wherever you were and wherever you are).' "
It was reported by Abu Ya'la in his musnad (11/496 hadeeth no. 6619) and has apparently been authenticated by Ibn Hajr in his work, "Al Mataleb alaliyyah bi zawaid athmaniyya" 3/267, and al-Haythami in his Majma' az-Zawaid, where he said that is has been reported by Abu Ya'la and the transmission of its men are reliable.
Does it prove Allah is in a place or does it, in fact, negate it?
The three points of this hadith I believe are the terms subhanak and ayn, and the tense switch from the perfect (past) 'kunta' to the aorist (present-future) 'takunu'. The latter pair is very indicative of the orientation of explicit tanazzuh in the doctrinal sense, because time change is by consensus inapplicable to Allah Most High. I.e., it is an affirmation of the Divine transcendence beyond place and time. Lexically it is possible to read it as:
Subhanaka `an 'ayna kunta' wa 'ayna takun'!
I.e., subhanaka `an al-ayn wal-mata. Exalted are you beyond 'where' and 'when'.
The mention of the seventh earth, also, makes clear that there is no specific connection between any assumed Divine where-ness and sensory height, as the hadith universalizes that connection to include every possible direction.