I've always thought it grew in the stomach, I mean, the acid obviously wouldn't harm it. If the embryo were in the lungs, breathing would be painful if it were even possible at all (breathing is painful when there are small obstructions in the lungs, not to mention writhing, phallic, needle-toothed death snakes.)
That's what happened with Kane's son. He started shoveling in all of that microwaved schezwan space-food and it was time to hit the road, through the sternum.