I find that inheritence allows me to save a ton of code, but using it widely does mean you need the ability to refactor, which isn't hard in Java or C#, but can be more of a pain in languages like Ruby.
This hasn't been my experience at all. Most class hierarchies I've seen don't got much further than 2-3 levels deep, and each level deals with a specific level of functionality. In most cases, the last descendant class contains the functionality that the end class "user" is most likely to be interested in, while the ancestor classes are most likely to contain foundation code/data that is primarily used by the descendant classes internally (but not always, of course).
Also, most modern IDE's have a "Find Declaration" or something similar that allows very simple traversal of class hierarchies. And the help systems are built to allow for easy navigation of the hierarchy so that you can visualize the inheritance paths.
You often end up with a subclass that may be thousands of lines in length if you consider it's flattened definition.