John--The name I've always heard mountain folks use is water dog, which is a synonym for hellbender. When I was part of stream sampling in Deep Creek this summer we shocked up a bunch of them. To my knowledge (which is limited to personal experience and with no scientific backing) they live in streams. The only time I've ever seen one out of the water was when it was caught on a trot line, throw line, fishing line, or by shocking.
They are singularly ugly creatures and I've seen them up to close to two feet in length.