Mosaic to a new Raster Does NOT work properly in 10.0

[MarkHall2]

I have a large amount of 5M Elevation data that I am trying to mosaic together using the "Mosaic to new Raster" tool.  Each Tile is around 35MB in size and I am trying to Mosaic 30 tiles together at one time.  When I do this the mosaiced raster is produced except it has a ton of white no data lines in it which you can see in my attached screenshot.  The data is there in the original source files and this does not happen in 9.3 so what is happening to the data? 
Also, if I try and mosaic only two tiles together and then mosaic the rest of them together into the existing mosaic using the "Mosaic" tool it just bombs and shuts down ArcMap.  With Version 10 I am running Windows 7 on one machine and XP on the other with both of them having the same exact problems.  So far I have not been a happy camper with the raster processing in Version 10, way too many bugs.  Anyone know of a fix or workaround?

[TimothyHales]

What happens when you zoom in on the image beyond the pyramids?  Do the source rasters have the white lines?

If you have ArcEditor or ArcInfo try creating a Mosaic Dataset (unmanaged) with the images and see if the white lines remain.  If images display correctly, you could then export the mosaic dataset out to another raster format.

The workflow and tools to create mosaic datasets

[MarkHall2]

I am not building pyramids since these smaller mosaics will be part of a larger mosaic and then projected to wgs84.  At that point I build the pyramids because there is no point in spending all of that processing time on something that is not needed.  The source data does not have the white lines and when you use the identify tool to click on the raster it gives you a "no data" return on any of the white areas.  It simply isnt there.  It should also be noted that I have been using Arcmap since the ArcInfo days and this is the first time I have ever seen this error.  Seems the revamp of version 10 has hosed up some things.