Sorry for the delay. I will try increasing the range of the SFX as I can see that it is in fact quite short ranged. And thank you for pointing out the error with the H button. It is definitely a bug that may have caused the error. But if you want me to have a closer look on it, you can send me your save file to happypillowhelp@gmail.com, its located at %APPDATA%\..\LocalLow\HappyPillow\Goblin Burrow Manager
I have just uploaded a beta version of the new update, which comes with the option to restart any part of the story. After loading the save, press the pause button and use the chapter selection button. This should be the fastest way to retry the quest. Sorry for the trouble.