Repeat-pass ICESat altimetry has revealed 124 discrete surface height changes across the Antarctic Ice Sheet, interpreted to be caused by subglacial lake discharges (surface lowering) and inputs (surface uplift). Few of these active lakes have been confirmed by radio-echo sounding (RES) despite several attempts (notable exceptions are Lake Whillans and three in the Adventure Subglacial Trench). Here we present targeted RES and radar altimeter data from an "active lake" location within the upstream Institute Ice Stream, into which at least 0.12 km3 of water was previously calculated to have flowed between October 2003 and February 2008. We use a series of transects to establish an accurate depiction of the influences of bed topography and ice surface elevation on water storage potential. The location of surface height change is downstream of a subglacial hill on the flank of a distinct topographic hollow, where RES reveals no obvious evidence for deep (> 10 m) water. The regional hydropotential reveals a sink coincident with the surface change, however. Governed by the location of the hydrological sink, basal water will likely "drape" over topography in a manner dissimilar to subglacial lakes where flat strong specular RES reflections are measured. The inability of RES to detect the active lake means that more of the Antarctic ice sheet bed may contain stored water than is currently appreciated. Variation in ice surface elevation data sets leads to significant alteration in calculations of the local flow of basal water indicating the value of, and need for, high-resolution altimetry data in both space and time to establish and characterise subglacial hydrological processes.