Is it possible to have a memory leak in managed code? (specifically C# 3.0)

For instance if I have a hierarchical data structure:

class Node
{
    public List<Node> children;
}

and it is populated to many levels down then in one of the parents go:

myNode.children.Clear();

which will clear all the references to the immediate children - but how about all the grand children, grand grand children etc. that were referenced by those immediate children? Is C# clever enough to know they are no longer needed and they will be garbage collected?

I have read using WPF data binding without implementing interface INotifyChanged can cause memory leaks: http://blogs.msdn.com/b/micmcd/archive/2008/03/07/avoiding-a-wpf-memory-leak-with-databinding-black-magic.aspx, how is that possible in a managed environment?