The Pilgrim, in a great rage, went into the abbot's chamber, hauled out the corpse of the old ghost who had killed himself against the wall,

觸死鬼 is "the ghost who dashed himself dead." Note that the narrator has adopted the monks' contemptuous phrase for their own patriarch within a few hundred characters of his death.

stripped it and looked it over closely — and on the whole body there was no such treasure. He dug the abbot's quarters up three feet deep besides, and found not a shadow of it.

選剝 — 剝 is read bāo in this vernacular sense, "to strip, to peel." The corpse is undressed and searched, and the floor of the dead man's cell dug three 尺 down. Nothing in this chapter is treated with reverence except a coat.

The Pilgrim pondered a while, then asked, "Is there any goblin hereabouts that has become a spirit?"

忖量 takes liáng, the verb, "to weigh in the mind." It is the first intelligent question anybody has asked since the fire — and it comes after the exhumation, not before it.

The prior said, "Had your Worship not asked, we should never have thought to tell you.

莫想得知 ("you could never have come to know it"); 得知 takes dé. The prior has known there was a demon on the next mountain since long before Sanzang arrived, and has not mentioned it.

"Due south-east of us there stands a Black Wind Mountain, and within the Black Wind Cave there is a Great King of Black Wind.

常與他講道 — "often discoursed with him on the Way." The abbot of the Guanyin Chan Monastery and the bear-spirit of Black Wind Mountain were in the habit of discussing doctrine together. The novel lets this fall as an aside, and it is the most damning aside in the chapter. Note also that the prior puts the mountain 正東南, south-east, where the narrator earlier put it due south.

"This old dead ghost of ours often discoursed on the Way with him. He is a fiend. There is nothing else of the kind."

別無甚物: 甚 is shén, short for 甚麼 — "nothing else of the sort." Having just named the one demon within a day's walk, the prior adds that there is nothing unusual about the neighbourhood.

The Pilgrim said, "How far off is that mountain?" The prior said, "Only twenty lǐ. That peak you can see from here — that is it."

Twenty lǐ, and visible from the courtyard where they are standing. The whole geography of the theft has been in plain sight the entire time.

The Pilgrim laughed. "Set your heart at rest, master. No need to argue it. Beyond a doubt it is that black fiend who has stolen it."

一定…無疑 — "certainly… beyond doubt." Wukong reasons like a man who has been an outlaw, and he will restate the same conclusion in the next passage with the firmer 坐定, "it is settled." He knows what a fire looks like from a mountain at night, because he has watched one from a mountain at night.