Sorry, long post...
This case has always fascinated me, primarily because I am a Deadhead, and this same scenario could have been me at any point in time during my teenage years. I came from a great family, had a terrific childhood, yet I jumped into the lifestyle with both feet and took many risks that could have ended poorly -- my background/faith/upbringing had no bearing on the choices I made. The Grateful Dead did not have a huge radio presence, so if these kids were fans, it's not unreasonable to think that they were turned on to the music by someone living in that "hippie subculture." That leads me to believe that they may have begun experimenting with drugs, which could also explain the friction they were experiencing within their respective families. I understand that just because you like a particular genre of music, or follow a band with a reputation for a giant party scene, it doesn't mean that you necessarily participate in that lifestyle, but it's a great likelihood -- kids are extremely impressionable at that age, and when you're in a setting where everyone is doing something, there's a good chance that you're going to follow suit just so you fit in. God, why else would there have been things like the mullet, and white patent leather shoes?!?
Dead shows were like a carnival -- fans would congregate in the parking lots and even take over streets, waiting for the show to start and partying the whole time with the people around them, hoping for a ticket if they didn't already have one ("miracles".) There was a whole contingent of people who traveled around the country from show to show, hitching rides and living off the generosity of others or from what they could steal. I had friends who left to follow the Dead to California, and never came back. Others would make it a point to seek out those we knew in different cities to keep in touch (and surprisingly enough, it's not that hard to find people you know in a crowd of 150,000 people -- I can recall running into the same people over and over at different shows, even if I didn't know them personally.) Deadheads formed a community that became like a loosely-knit extended family, and you shared everything with each other -- food, partners, drugs, clothes. In all of the years I attended shows, I rarely saw a fight happen -- it was all about going with the flow, and getting your groove on, as hokey as that sounds. Whether it was the music or the drugs that inspired you, the goal was to hear those notes float through the air and let the music move you in an almost spiritual way.
I live in upstate NY, near Binghamton, and am extremely familiar with the Finger Lakes area. I agree that if the kids were hitching from Narrowsburg, they probably were headed up 97. From there the most logical route would be 97 to Hancock, where they could pick up 17/86. For someone unfamiliar with the area, the most direct and fastest route from there to Watkins Glen would be 17/86 to route 14. The Delaware River runs next to 97, and although it does have areas of rapids, it's a fairly tame river in the summer months -- I have inner-tubed sections several times, and it's quite the lazy floating trip. The Susquehanna runs along 17/86, and same thing -- during the summer, it doesn't run particularly fast. During the Spring both rivers can become dangerous and there is frequent flooding, and we have had our share of flooding in the Fall, but in late Summer it's not normally an issue (except for Hurricane Agnes in 1972, that was pretty wild...) Those are the biggest rivers in the area; if the driver overshot picking up route 14, they would eventually run into the Chemung River, but that's really just like the other two. Same thing with the many creeks and streams that dot the landscape from there to here -- it's very unlikely that there would be flash-flooding or fast-moving water even after a heavy rain.
I don't think it's likely that they went overland instead of hitching on the main road -- 97 pretty much ties Narrowsburg to Hancock, and they would have had to go well out of their way to get into the forest. The only reason to do that would be if they were trying to hide from someone, but from the sounds of it, they had a sign with their destination displayed and weren't trying to be subversive about where they were going. I guess it might be possible that they got off the highway in Owego and headed overland to Watkins Glen, but I would think after flogging their way through forest and underbrush and climbing hill after endless hill that would have gotten old pretty fast and they would have stuck to the first road they came across. It really lessens the chance of getting a ride, as you didn't get a lot of traffic out in the sticks other than farmers.
Someone up-thread mentioned them possibly living in Burdett, near the Finger Lakes National Forest -- it's a very rural area, and would have been quite possible to live a quiet life with plenty of privacy. Burdett is in between Seneca & Cayuga Lakes, and kind of between Watkins Glen and Ithaca. While Watkins Glen isn't really a city (even today, it's more of a sleepy village that caters to folks touring the wine trail and racing fans), Ithaca is good-sized and kind of known for its acceptance of the "granola culture." There are plenty of employment opportunities, and a large, transient population due to the colleges. What I'm saying is that it's easy to be anonymous there. The area around Burdett is largely agricultural, with many farms and vineyards -- it's quite possible to live off the land comfortably. Trying to locate someone who has reinvented themselves would be harder than finding the proverbial needle in a haystack -- I've spent my entire life in the area and there are still back roads that I newly discover on my adventures.
I'm still confused as to whether the kids were "lost" on the way to the concert, or on the return trip.
I have a couple of theories... If the guys in the VW Bus were partaking of (LSD, heroin, bennies, whatever else was popular in 1973) and Mitchel & Bonnie were not wanting to indulge, then they may have been left behind at the river because they were being wet blankets. I hitchhiked home from parties more than once because my date was a dud, or my date left with someone else. It's a crappy thing to do, but sometimes young people do crappy things. Conversely, maybe the kids had indulged a little too much and were annoying, so they were left behind at the river. The fact that either of the possible rivers probably weren't flowing dangerously fast could account for the VW Bus guys not being too worked up about the kids being in the water. Being under the influence could have also made it seem less of an emergency and the driver may have even talked himself out of being worried by the time he "got to the next town." I don't have a plausible explanation for what happened to the kids after that -- if it was on the way to the concert, then I would assume that they continued hitching and arrived there.
Knowing the Deadhead community, and how these kids would have been embraced and accepted, my feeling is that they decided to follow the band and headed off with others traveling in the same direction. It's completely believable that they were spotted by the parent's BFFs -- there were fans who "toured" with the band for decades. It was like a mobile commune of sorts. My guess is that they followed the band for a while, and either wound up on the West coast or succumbed to a drug overdose at some point. I don't really believe that they were murdered, Deadheads might be inclined to steal you blind, but they're a pretty peaceful lot, seriously. The worst thing that ever happened to me at a show was a girl banging me in the head with her elbow by mistake. I even managed to sleep right out in the open in a parking lot, waking up to a stray dog sleeping on top of me, but otherwise unmolested. I'm more inclined to believe that they encountered bad drugs along their journey, or truly reinvented themselves and continued their lives somewhere else than NYC.