Try using the shovel in that spot without clicking the mound
I tried as you suggested and it does the shoveling animation with the chest popping up but then the chest disappears. Lae'zel says nothing interesting here. I did this a couple times with the same thing happening.
BUT! I handed the shovel back to my main character who originally clicked on the mound and tried the dig up item option on the menu and it worked finally!
Thank for the suggestion.
