The lake is still here and as beautiful as ever. It was quite low for a few years after we moved here in 2001, but it has recovered. There have always been cycles in the lake level and they can be quite spectacular because it is a shallow lake. As such, only a few meters change in the water level can result in water receding some distance from the shoreline.
Over the past few years, many communities, including Chapala itself, have rebuilt and even added to their public 'malecons' and these 'boardwalks' attract a lot of people, especially on the weekends.
So, no, it hasn't 'dried up' and we hope it never does. If you want proof, send me a PM with your e-mail address and I'll send you some current photos.

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Read "Streets of Glass" to discover the experience of a retired couple's permanent move to Lake Chapala, Jalisco, Mexico.
PM for details.