I'm experiencing this issue with the same setup- 3x3x2, cobblestone around the sides and a dirt cap on top. the pile has been "burning" with the usually-desirable lazy puffs of smoke and no crackling sounds for four or five-in game days but nothing has converted to charcoal. I've tried three different pits of different sizes but nothing seems to be working for me. does it need to be belowground? I built a cobblestone wall structure on the surface and filled that with firewood.