I'm using 10m DEM rasters from the NRCS Data Gateway for a large portion of California. The problem is some strange tiling that appears after merging, but isn't present in the original data (before merging). The grids create low points, so flow accumulation etc is drawn into them.
I've tried mosaic to new raster, create raster catalog and filter in ArcGIS 10.2, merge and build vrt in Qgis2.4 but the problem persists throughout.
Something to note is that there are apparently two sets of grids, one with regular equant shapes, and then one set where tiles overlap (on both edges of the tile). I discovered this with "build raster catalog" which creates a feature displaying the edges of the files in the catalog.
The lines are flat lows, which creates a problem trying to do any sort of slope stability or hydrologic analysis...which is the whole point of this exercise.
use BILINEAR interpolation (in environment settings) for DEM, these grids are caused by the default nearest neighbor interpolation.