Yes, it seems to be underground. One post places the mosaic basin in the ruined temple three feet below the current ground level; it would have been closer to the original surface, given the accumulation of layers over time, but it would still have to be recessed in order to act as a basin: https://forum.atlas-games.com/t/escort-quests-after-death/304/1. The basin itself may or may not have been below ground, but the point is, that level of the original temple (the temple proper) was the ground floor. I'm sure it had steps leading up to it, in the normal Greek style, and so I suppose it might be more accurate to say that the temple proper was a few feet above ground level.
The room that Viola wants to use as a lab is downstairs from the main room of the temple: https://forum.atlas-games.com/t/escort-quests-after-death/304/1), and you have to walk through it to get to the stairs, and there's no mention of turning around behind the waterfall. That would allow the light to shine down the stairs. However, that would also place the underground floor at a point not underneath the ground floor, which is strange architecture, to say the least (it is a faerie regio, but it's supposed to be a copy of the original temple).
Scott