if it was on (and probably even, if its not on I'd say check this anyway) then you are going to have to do the following to fix it:
1. exit and save the map... you can't make this change while its running.
2. go to Data/save/{your save file,i.e region 2}/raws/material_template_default.txt
3. open that file and look down around line 72 it should say:
YES_KOBOLD_UNDIGGABLE[UNDIGGABLE]
4. change it, remove it, whatever you have to do, but you have to get rid of atleast the [ in front of UNDIGGABLE.
5. reload the map and you should be able to dig in stone.
warning... this tag causes some "unusual" things to occur... you may have to actually build down stairs on tiles you tried to dig down into with channel or down stairs prior to this fix. The floor above it was dug out but since the stone was undiggable it wouldn't let you dig into this layer creating a paradox of not having a floor to dig down from to dig into the layer. If this happened building a stair down above the tile you tried to dig will replace the missing floor you already dug out.