Internal waves with diurnal period dominated velocities measured by an Acoustic Doppler Profiler (ADP) in a small lake (main basin 3000 m by 400 m by 18 m). ADP profiles and an along-lake temperature section indicate that the observed waves, like seiches, had horizontal wavelengths exceeding the metalimnion length. However, unlike non-dissipative seiches, the observed waves propagated vertically, carrying energy to the lakebed where waves were absorbed, rather than being strongly reflected. This absorption is predicted by a standard parameterization of boundary layer dissipation. The absence of upward-propagating energy precludes seiche resonance, limits focusing of waves toward attractors, and suggests that hypolimnion dissipation was limited by the supply of downward-propagating energy. Vertical wavelengths were less than the lake depth. Simplified calculations suggest that vertically-propagating waves, as opposed to vertically standing seiches, are most likely where vertical wavelengths are short, near-bed stratification is strong, and lakes are short and deep.