Here's the technique I would recommend for making sure you/your detector are not crazy. When you get a hit and have the plug or what not dug out, set the plug aside and run the detector over it, and also over the new hole. If you get a hit over only the plug, you know to search the plug. If you get a hit over both the plug and the hole, there's a chance that either you/your detector are crazy, or you could have a dump/spill site (e.g., a lot of nails in the dirt). Worst case, it could mean you have high metal content in the soil. In any case, if the plug went off, cool, you know where to look. Use the detector or a probe to isolate the hit to one half of the plug, then poke around in it.
Now if it went off over the hole, here is how to proceed. Take a shovelful of dirt out of the hole and set it aside. Now run the detector over both the shovelful of dirt and the hole, the same way you just did for the plug. If you get a hit for the shovelful but not the hole, then you know your prize is near, and you can rummage through the dirt for it. If you only get a hit over the hole, then you know you haven't reached it yet. Time to take another shovelful of dirt. If you end up getting a whole foot deep and still haven't found the target, then try making the hole wider as you may have missed the target in the walls of your hole. The fact is, unless something is wrong with your detector, if you keep getting a hit over your hole but not right next to the hole (over open ground) then there IS something down there, you just need to be persistent.
mcl