Butch, I think the question is appropriate, because film processing affects us all as photographers, and it is becoming more of an issue these days.
In general, I have found that outside of major cities, most 1 hour places offer only 35mm C41 processing in-store. My local Walmart also offers 1-hour APS. Same at the Walgreens. Everything else gets sent out. From there, I believe it goes to a central location, where it is sorted and disbursed further from there. For example, the economies of scale let them do 'next-day' C41 in HUGE jobs themselves, and they usually do. 35mm slides, 110 cartridges, and 120 get sent out from there, to places all over the country that the central location has contracted with. They come back when they come back.
I have not yet run into a Walmart or any 1-hour place that still does 120, but I'm sure it could be true. If he says he drops his 120 off at Walmart and they take it and return it processed, I would tend to believe that - but again, I'd bet it goes to the local aggregator, where it gets sorted and further sent out - unless the aggregator just happens to have enough demand for 120 to actually do it from time to time.
However, all this aside - we can see this is a losing battle, as the situation is getting worse and not better. Because so many pros still shoot 120, major cities will still have labs that can do it, but expect to pay pro prices, too.
For this reason, I have begun to limit my 120 shooting to B&W, as I live in a semi-rural area and like you, face long turn-around times by mailing stuff in or dropping it off. I only rarely shoot 35mm slide film now, preferring C41 which I can still have 1-hour processed. If I wanted to shoot a lot of 120 C41 or C6, I guess I'd consider investing in the equipment and chemistry to do my own processing at home. As it is, I'm happy to do my own B&W in 35mm and 120.
Best Regards,
Bill Mattocks