Hi Copygirl,
I will do my best to chest test and see if I can duplicate the issue. Usually when I place something I am holding I can see the outline of the target block, it has a black line border and that is where the held item is going to be set down, this time I did not see that and the chest was placed down never to be seen again.
Im excited to let the others on the server know that dropping the held item when taking damage is a feature not a flaw! It dawned on me that dropping something means I can swing my sword instead, woohoo
You are appreciated and your mod is delightful, trust me on this.
Soda Crumb aka Krum