My wife is a dog handler/trainer (police K9)....here's what I've seen her do with a dog that digs:
1. Pick a suitably-sized rubber toy (like a small Kong)...something you can easily throw but that won't injure the dog if he is hit. Hide so the dog cannot see you, but you can throw the toy at him, and when he starts digging, just toss it right next to him. This will startle him, and may be enough. Or, you may have to actually hit him with it subsequently. The important part of this, training-wise, is that the dog does not associate the negative reinforcement with you.
2. Method 2 costs money, but is very effective for this and just about any other training problem; it is an e-collar, which delivers a very mild shock to the dog from a remote control. Again, the negative reinforcement is not associated with you.
Many people think a e-collar is cruel. It is not. It is a very mild negative reinforcement. Before my wife will lend it to any of her dog training associates, she insists the handler shock themselves in the hand with it, just to experience what the dog will. I have done this, and it is very mild. But you have to be psychologically prepared to tolerate a mild yelp from the dog.
I have seen the e-collar used to cure her K9 of things like chasing deer or squirrels, barking etc. It usually takes only one shock, but you need to do it while the dog is doing the undesired behavior.
As I've sat on our couch relaxing, I've also seen such unusual things as a dog coming into our living room with a pair of shoes on a string tied to it's collar /w3tcompact/icons/laugh.gif After a few hours of this, that dog did not want to think about getting near the shoes again, much less chew on them.
