The expression "making a mountain out of a molehill" simply means making a big deal out of something that is actually a small deal, and it is easy to see how this expression came about. Molehills are simply mounds of earth serving as condominiums for moles, and they have never caused anyone harm except for maybe a stubbed toe if you were walking around the wilderness without any shoes on. Mountains, however, are very large mounds of earth and are constantly causing problems. They are very tall, and when people try to climb them they often fall off, or get lost and die of starvation. Sometimes, two countries fight over who really owns a mountain, and thousands of people have to go to war and come home grumpy or wounded. And, of course, mountains serve as homes to mountain goats and mountain lions, who enjoy attacking helpless picnickers and eating sandwiches or children. So when someone is making a mountain out of a molehill, they are pretending that something is as horrible as a war or a ruined picnic when it is really only as horrible as a stubbed toe.
Daniel Handler