Theories
The following examples are oft suggested explanations for what Mel's Hole may have actually been. Some seem more plausible than others, but all have been considered throughout the time in which Mel first called into the show.
Volcanic Cave/Lava Tube:
"Caves of various types and sizes occur where volcanic rocks are exposed. These are caves formed by flowing lava and by the effects of volcanic gases rather than by dissolution of the bedrock. Because volcanic caves form very close to the land surface, they are easily destroyed by erosion processes. As a result, such caves are usually found only in recent lava flows, those that are less than 20,000,000 years old.
Lava Tubes are the longest and most complicated of volcanic caves. They are the channels of rivers of lava that at some earlier time flowed downslope from a volcanic vent or fissure. Lava tubes develop best in highly fluid lava, notably a basaltic type known as pahohoe. They rarely form in rough, clinkery aa flows or in the more massive block lavas. In pahoehoe flows volatile components remain in solution in the molten rock where they decrease both the rate at which the lava solidifies and its viscosity. Because of this, pahoehoe lava flows like a sticky liquid, sometimes rushing down steep slopes and forming lava falls." -Source
The state of Washington resides over a rather large, and active volcanic zone. The purported location of Mel's Hole, outside of Ellensburg, is just to the east of Mount Rainier. For this reason, this is the most logical and likely explanation for many of what the hole might be. However, no such caves/tubes have been found that could pass for being the famous hole.
Other Geological Possibilities:
Small caves are produced in regions of active volcanism by at least three other processes. These are (1) pressure-ridge caves, (2) spatter cone chambers, and (3) blister caves.
The solidified crust of pahoehoe flows often buckles from the movement of lava underneath. The buckled crust appears as ridges several meters to a few tens of meters high, elongated perpendicular to the flow. So-called pressure-ridge caves can be formed beneath the ridges by the mechanical lifting of the roof rock. Such cavities typically measure one to two meters in height, have a roughly triangular cross section, and extend several hundred meters in length. Unlike lava tube caves that are oriented along the flow, pressure-ridge caves are oriented perpendicular to the flow.
Liquid lava can be forced upward through cracks in the congealed surface layers of the flow. When the ejected blobs of liquid freeze and weld together, they form spatter cones. If the lava subsequently drains from the feeder channel, a dome-shaped chamber is formed beneath such a cone. The depths of these spatter cone pits range from several meters to a few tens of meters.
Trapped steam or other gases can lift layers of lava while it is still in a plastic state to form small blister caves. These cavities consist of dome-shaped chambers somewhat resembling those of spatter cones. They are generally small, ranging from one to a few meters in diameter, but they often occur in great numbers in many lava flows rich in volatile components. -Source
The Hollow Earth Theory: Another common, albeit less likely, theory. This is the idea that the Earth itself is entirely hollow below a rather small layer of rock. This theory was prevalent centuries ago, but has been all but debunked by modern science. However, there is a small segment of the population that still believes that the Earth's center is hollow. In relation to Mel's Hole, the idea is that the reason the fishing line and items tossed in never seemed to "hit bottom" is because the hole lead to the empty interior of the planet.
Government Project/Weaponry: A popular theory is that Mel (and perhaps the previous owner of the property) unwittingly discovered some sort of military weapons tunnel or something related to a secret government project of the same idea. The location of the hole was known to be near the Yakima Training Center, and Fairchild Air Force Base was to the east, though not really all that close. The description of the original hole, however, doesn't seem to be that of a modern design. (The hole in Nevada could have been, though.)
There are no known weapons or projects that could account for an 80k feet hole as deep as the one Mel claimed to own. Therefor, there isn't much that can be said about this theory. Could it be a missile launch tube or some sort of weather controlling mainframe? Who knows.
It also seems that if it was related to the military or government, Mel wouldn't have had access to the property to begin with.
There are no known weapons or projects that could account for an 80k feet hole as deep as the one Mel claimed to own. Therefor, there isn't much that can be said about this theory. Could it be a missile launch tube or some sort of weather controlling mainframe? Who knows.
It also seems that if it was related to the military or government, Mel wouldn't have had access to the property to begin with.
Unknown type of natural formation: It is been said that the hole could be some kind of natural formation that has yet to be discovered or recognized by modern sciences. Obviously, it would make us rethink our understanding of how the Earth itself is comprised. Even the deepest known "man made" hole pales in comparison to the depth in which Mel claims his hole was. So if it was some sort of new formation, no other's have been discovered since.