"Its a permit, and my obj is to get the peak flows at two road crossings downstream of an earthen dam. Is this a watershed runoff model (i.e. HEC-HMS)? If so, how do you account for the stored water volume?"
You need to put together a watershed runoff model. I see to concerns with your explanation of the project. First, you need to look at your state's regulations and talk with the regulators. You need to know if your dam is classified as low, intermediate, or high hazard. This classification should point you toward the required precipitation frequency event.
Once you have the regulations and you know what you have to work with, you can start on the watershed runoff model.
I would strongly suggest, and I don't know your background, so I apologize if I step out of bounds, but if you've never put together a runoff model, maybe you should contact an engineer in your state that has dam hydrology experience. There is a lot of liability tied up in these types of projects even if you are only doing calculations. If the dam were to ever breach, and someone was hunt, the attorneys would cast a wide net and sue ever engineer that just looked at the dam on a Sunday evening stroll.