Running forge .965 and a number of mods on a server. I've had graves appear in the nether, but in the overworld, I'm almost always having to get the server operator to intervene because all my items are disappearing with no gravestone in sight wherever I die, even on flat, open terrain with no liquids or obstructions. I find the XP where it should be (I have death waypoints via zan's minimap) but I'm constantly losing everything, including my reinforced strongboxes full of loot and tools.

Log file for mods list etc:
https://dl.dropboxusercontent.com/u/203721/ForgeModLoader-client-0.log

No error is generated on the server or client, the grave simply fails to appear (or at least, appear at the actual location of death, and I have no way to know if it's just appearing somewhere else hidden away where it can't be found). Other users report mostly no problems with rare instances of missing graves, resulting from a creeper blast according to one, but zombies or skeletons have been doing it to me.

If your items arent being dropped there IS a cave. Chances are it got confused and put it in a cave below where you died. This happens a lot in snow biomes. Its been improved in the latest dev builds and will be improved more in the future.

Grave*

Well, I have tried digging straight down from the death point and found nothing each time, all the way to bedrock... Solid rock/dirt/gravel.

Also, setting gravestones to disabled doesn't seem to actually disable them. It's set both on client and server configs.

All intentional tests so far result in properly appearing gravestones exactly where I died. Could the mud blocks that you sink into halfway cause intermittent problems for grave spawning maybe?