Dear Henrik,
very nice indeed! What a beautiful contribution. I had a group of students this year who modelled rainfall-runoff from some digital elevation data. Your "mountain landscape" looks really nice for that. Here is the result for Aberdeen (UK)
ClearAll["Global`*"]
nn = 7;
data = QuantityMagnitude[
   GeoElevationData[
    GeoDisk[Entity[
      "City", {"Aberdeen", "AberdeenCity", "UnitedKingdom"}], 
     Quantity[10, "Miles"]]]];
f = ListInterpolation[data];
(*test image:*)
img = 
 DensityPlot[f[x, y], {x, 1, nn}, {y, 1, nn}, ImagePadding -> None, 
  Frame -> None, ColorFunction -> GrayLevel]
(*water shed components of image*)
wsc0 = WatershedComponents[img];
(*example:merging regions with indices {8,9,10,(indx=)11}*)
indx = 11;
wsc1 = wsc0 /. {8 -> indx, 9 -> indx, 10 -> indx};
(*ensure there are no 0s at border pixel:*)
wsc1Pad = ArrayPad[wsc1, 1, -1];
(*detect 0-pixels:*)
nullIdx = 
  First /@ Select[Flatten[MapIndexed[{#2, #1} &, wsc1Pad, {2}], 1], 
    Last[#] == 0 &];
(*helper function for counting indx-pixels around coord*)
nearIndxCount[coord_, indx_] := 
 Module[{nears}, 
  nears = coord + # & /@ {{-1, -1}, {0, -1}, {1, -1}, {-1, 0}, {1, 
      0}, {-1, 1}, {0, 1}, {1, 1}};
  Count[Extract[wsc1Pad, nears], indx]]
betweens = 
  First /@ Select[{#, nearIndxCount[#, indx]} & /@ nullIdx, 
    Last[#] > 3 &];
Set[wsc1Pad[[Sequence @@ #]], indx] & /@ betweens;
(*remove padding:*)
wsc1 = ArrayPad[wsc1Pad, -1];
Plot3D[f[x, y], {x, 1, nn}, {y, 1, nn}, ImageSize -> 700, 
 PlotStyle -> 
  Directive[Specularity[White, 100], Texture[Colorize@wsc1]], 
 PlotPoints -> 50, MeshFunctions -> {#3 &}]
Plot3D[f[x, y], {x, 1, nn}, {y, 1, nn}, ImageSize -> 700, 
 PlotStyle -> 
  Directive[Specularity[White, 100], 
   Texture[ImageCompose[{Colorize@wsc1, 
      0.95}, {GeoGraphics[{GeoStyling[Opacity[0.0]], 
        GeoDisk[Entity[
          "City", {"Aberdeen", "AberdeenCity", "UnitedKingdom"}], 
         Quantity[10, "Miles"]]}, GeoBackground -> "ReliefMap"], 
      0.65}]]], PlotPoints -> 100, MeshFunctions -> {#3 &}]

Thanks for posting! 
Cheers,
M.
PS: I kept the black lines, because I like them.