Hi Eric, thanks for your reply. The hillshade does look fine if I zoom in, however, pyramids are listed as absent under Raster Information in the hillshade's Source tab, and a resampling method is not indicated.
I mosaicked the original DEM layer through the Mosaic to New Raster tool, importing the spatial reference from the original DEM's. The spatial reference was originally in WGS_1984, while the data frame was in ED_1950_UTM_Zone_30N, so I used the Project Raster tool to reproject the mosaicked DEM's into ED_1950_UTM_Zone_30N. I'm not sure what you mean by "unit of the pixel (z unit) data". The cell size (X,Y) is 0.00083333333, 0.00083333333. Pixel type - signed integer, pixel depth - 16 bit, pyramids are level 5; nearest neighbor, if that helps.
I tried to mosaic through the Mosaic Dataset tool, I created the geodatabase and added the layers using the Add Rasters to Mosaic Dataset tool, but the output was just solid gray. I got around this last time by changing the stretch to percent clip, but when I try to do that this time, it would not let me compute the histograms and nothing changed. Also, I did go into the mosaic dataset properties after I created the dataset and transformed the geographic coordinate system, like it says in the ArcGIS help window about Create Mosaic Datasets, so I think that should be all good. Hopefully there is a way around this.
Thank you for all your help, I really appreciate it,
Graham