I wasn't able to follow the directions on the note exactly, but I did find the treasure. It's in Cademia. Go up to the north east, near the water. You should see a sort of flat hill area. Move away from the flat hill towards the south west, looking for "loose dirt" on the ground. When you find "loose dirt", dig there. If you get to the fenced in garden area, you've gone too far to the south west, so turn around and head back towards the flat hill.
I have no idea if this will help anyone or not, but I thought I'd post it anyway.