after installing mountain lion the local mail boxes disappeared

Is there a triangle next to your inbox? Click it and that will reveal all the individual mailboxes.

In the Mailboxes Sidebar, hover over "On My Mac" and you should see "Show" pop up. Click Show and your mailboxes should then be visable.

This is my problem too:

All of my local mailboxes (On my Mac) disappeared from the sidebar. However, I do not have the 'triangle' on the Inbox that I can turn to reveal the list of mailboxes -- that disappeared too (and nothing happens when I hover over "Inbox"). I do know that the mailboxes are still there, somewhere, because when I go to create a New Mailbox, I can navigate to "On My Mac" and the entire mailbox list shows up there in the dropdown. How do I get them back onto my sidebar if the option to do that is no longer on the "Inbox" icon?

I have the same problem. and can not figure out how to restore this. On my MAc does not show my former local folders