Hillshade Tool Returns Strange Grid

[kwatter48]

I am trying to create a hillshade from a mosaic dataset I created from DEMs for portions of Massachusetts, Connecticut, and Rhode Island. My mosaic raster looks correct, but the hillshade tool creates a strange grid pattern not at all representing the elevation data in the mosaic. I am not sure what would cause this or how to resolve it. Thoughts? 

 

Mosaic DEM above

Hillshade product from tool.

[Robert_LeClair]

Interesting!  So a question for you - what is the coordinate system of the raster mosaic?  Is it a geographic or projected coordinate system?  If geographic (i.e. WGS 1984 for example), I would recommend you run the Project Raster GP tool first to UTM or Stateplane.  Then run the Raster Function again.  Does the output change to expected results?