I considered that he could have been being sarcastic ("Lambda Core" is set entirely underground), but decided it was worth being made the fool as long as nobody else was mistaken by it.
Yes, "Surface Tension" basically starts at the dam, although there's a small map before it, and it continues on all the way through some desert areas, the cliffside, and some military establishments, until you get to "Forget About Freeman!", which shortly takes you to the Lambda Complex.