Something smells to high heaven here.

When I lived in Mountain View (between '83 and '91), there was an attempt to wreck the Hetch Hetchy very similar to this one. It was bitterly opposed by environmental groups who pointed out that the loss of this reservoir would mean the need to replace it by innumerable water projects which would cause much more damage to the environment than would be mediated by the restoration of the original terrain. It was on the local news for weeks, and I distinctly remember reading an article in the SJ Mercury News which showcased the outrage of local environmentalists and there were charges that it was a developer's plot to generate limitless pork barrel from the vast construction projects which would be needed to drain, then replace the reservoir. If I recall, some conservative politicians linked to construction interests were allegedly behind the deal, and the thought of federal subsidies pouring in to finance it got the unions behind it as well, and the SJMN editorial page remarked at how these gentlemen had suddenly become so concerned about restoring the Reservoir to its former glory. The local tree huggers were the first to admit that Hetch Hetchy had been a rival to Yosemite in natural grandeur, but that there was no way that lost world could be restored after decades of inundation. It was the environmental community that defeated the project and sent the developers packing.

Perhaps you can turn your formidable researching skills to locating some records of that time, Tom. I wish I could be more of help with solid references, but I know that at the time I was cheering that the developers and their phony environmental scam was roundly trounced by the environmental community. Now everyone seems to have switched sides here. Something stinks big time.