Below is a guide on the locations of the 7 Digletts in Loop Lagoon.
1. Along the cliff near the entrance to the Courageous Cavern
2. Just past the dojo trainer along the water at the small tip where the grass and sand meet
3. From the previous Diglett, continue following the sand along the shore to find the Diglett near the cliff wall.
4. On the island in the middle of the lagoon next to a berry tree
5. From the previous Diglett, follow the edge through the tall grass to find a Diglett along the giant rock across from the tree.
6. & 7. On the small beach near Courageous Cavern accessible via water
Click here for the next guide on the Challenge Beach Digletts!