I would dig into the embankment until I couldn't see any more evidence of critter damage....that may mean a lot more digging and repair than you anticipated. I've seen this on my ponds, but with nutria. I tried patching, and other short cuts...none of which worked. Nothing worked for me short of doing the job right.

By the way, Mr. Dan has plans for a reportedly highly effective muskrat trap...plans which he graciously sent me some time back, but for which I still haven't built myself. Thanks Dan.