Yes, the cave the yeti is in is actually a full set with lots of rockwork. The Yeti is hanging from a train track structure above with it's left arm, having already broken a section of that track, and swinging at you with it's right arm. These tracks can be seen going off into a cave to the top left of the yeti.
"Fun" fact: there are actually three strobe lights for "disco" mode, not just one, as commonly believed! As you approach, two strobe lights from behind the figure alternate flashes. Then, as you get closer, it switches to the strobe facing the front of the figure.
I think what I find more frustrating than just fixing the yeti is that they haven't bothered to try an alternate way to bring new life to the scene. Why not install some dynamic lighting effects that enable you to actually see the scene but still obscure the yeti enough so you don't see that it isn't moving? There are so many things that could be done besides three strobe lights.