Can the issue be reproduced?
Yes

Dying by a falling block, tried twice with a deathworm from fire & ice, deletes your grave marker and all your items.

So you were killed by a Deathworm, and no grave spawned?

FYI, you can restore your inventory with the command /tmg_restore playername latest
You can also cycle through deaths with tab, if you omit latest from the command.

Not that I could tell, I did get the grave sheet when I respawned but when I went back to where I died there was just a bunch of sand. I dug down and no grave stone.

Thanks, I didn't know that.

Did you check around your death waypoint? Sometimes falling blocks can displace the grave, it'll try to go to the nearest suitable location.

I did, I can double check to make sure I didn't miss anything. I did find another grave for another player in my single player game.

Errr that's... odd. Can you check it's contents?

I would but it seems I don't have access to any commands. Unless I'm doing something wrong which is very possible.

If you're in single player, open to LAN and enable cheats.

Trying to restore the grave doesn't work. I'm trying tmg_restore playername latest playername

You did substitute playername for your playername right? Also, remember backslash and only playername once, like I wrote it.