Hydrologic-land surface models (H-LSMs) offer a physically-based framework for representing and predicting the present and future states of the extensive high-latitude permafrost areas worldwide. Their primary challenge, however, is that soil temperature data are severely limited, and traditional model validation, based only on streamflow, can show the right fit to these data for the wrong reasons. Here, we address this challenge by (1) collecting existing data in various forms including in-situ borehole data and different large-scale permafrost maps in addition to streamflow data, (2) comprehensively evaluating the performance of an H-LSM with a wide range of possible process parametrizations and initializations, and (3) assessing possible trade-offs in model performance in concurrently representing hydrologic and permafrost dynamics, thereby pointing to the possible model deficiencies that require improvement. As a case study, we focus on the sub-arctic Liard River Basin in Canada, which typifies vast northern sporadic and discontinuous permafrost regions. Our findings reveal that different process parameterizations tend to align with different data sources or variables, which largely exhibit inconsistencies among themselves. We further observe that a model may fail to represent permafrost occurrence yet seemingly fit streamflows adequately. Nonetheless, we demonstrate that accurately representing essential permafrost dynamics, including the active soil layer and insulation effects from snow cover and soil organic matter, is crucial for developing high-fidelity models in these regions. Given the complexity of processes and the incompatibility among different data sources/variables, we conclude that employing an ensemble of carefully designed model parameterizations is essential to provide a reliable picture of the current conditions and future spatio-temporal co-evolution of hydrology and permafrost.