One notorious aspect of KQ4 is that the game gives you 5 attempts at digging before the shovel breaks. You have to be standing to the side of wherever you want to dig, not on top, which isn't obvious until you've made at least one attempt.

To make matters worse, the game gives no indication that the shovel will break after 5 uses, leaving you stuck restoring, or worse, starting over if all your saves are from after the missed dig attempt.

Debugger to the rescue! Assuming you're playing the version sold here on GoG (SCI with ScummVM), you can use the following steps to repair your shovel. Maybe it works on other versions too, I don't know.

1. Type "overtime nosleep" to activate debug mode.
2. Walk to another screen.
3. Notice that you now have a menu called Debug.
4. Choose Set Var from the Debug Menu.
5. Enter Variable No. 133
6. Enter Value 0 (this is the number of times you have dug, you could use any number from 0-4 here).
7. If your shovel is not yet broken, then you're done! If it is broken, continue on.
8. Choose Set Debug from the Debug Menu.
9. Walk to another screen.
10. A yellow debugger screen should appear.
11. Type "send ?Shovel loop 0" into the debug screen (case matters, so make sure you have that capital S on Shovel. Also note that is a zero at the end, not the letter O).
12. Type "go" to return to the game.
13. Check your inventory and your Shovel should no longer be broken.

Hopefully that helps someone out!

If that doesn't work, you could try variable 113 (Linux/ScummVM 2.2.0).