Yes, the interior of the Sierra Nevada range is like a huge sponge, soaking up water, which comes out much later as springs and lower elevation ground-water. Yes, there are often underground rivers and lakes. This is typical of granitic mountain ranges.
When I worked at the Pine Creek tungsten mine (near Bishop) one of our major problems underground was the constant flow of water in the form of small rivers and seepage. We had to wear rubber rain suits, rubber boots, and hard-hats. In the early years of operation, the crews sometimes had to use rubber rafts to get around in some locations. The train that carried workers underground (2 1/2 miles inside Wheeler Ridge) used inclosed cars to protect the crews from the waterfalls as the train moved deeper into the mountain!
