How to remove a Heightfield's surrounding Box :'(

[Tudor]

I feel the picture tells it all so I'll post that first
I have for the most part been able to work around this issue using Heightfield Adjust Vertical
But for some reason if I don't have extra data around a file everything goes up in smoke.

In the picture you can see a pit I'm trying to insert into the landscape.
I'm essentially trying to dig a hole.   
The problem is that when I pull the Terragen (.ter) file exported from Global Mapper into Terragen it puts a box around the edge.  If I reduce the height using the operator I end up with a box dug in the ground and my pit sticking up from the boxed hole... as seen in the below pic.
[attach=1]
Again this is most likely an easy fix but I just can't figure it out.
Any help would be greatly appreciated.  I'm feeling crunched.

Cheers,
Tudor

ps.  I've attached the original visualization of the shape file just so people get a sense of where the data is coming from.  Keep in mind the export expects me to select a boxed area... hence the box that comes into Terragen

[Dune]

Does it need to be a stepped area, or a smooth hole? If I were to do this, I would simply paint a greyscale (16-bit) map in photoshop (using the shapefile as basis to draw upon in another layer). If it needs to be stepped, you can choose for a 8-bit file, or add a strata shader in TG. Just use the greyscale map in an image map shader and displace down. Very easy.
Another method would be to make a vector displacement map, but that's not necessary if you don't need 'overhangs', or lateral displacemenst in that hole.

[Tudor]

Thanks for your response Dune. 
When you say 16-bit in Photoshop do you mean image > Mode > 16 bit/Channel?
What file format do you save it as once you are done?

I'm having trouble getting something I can properly manipulate out of GlobalMapper which seems to have been a significant part of my problem... that and my inability to grasp simple tasks.  The hole does need to be stepped (it is an open mining pit).

I appreciate you taking the time to help me out.
Regards,
Tudor

[Dune]

Yes, and it could be a greyscale tiff, for instance. But if you need it stepped, even 8-bit (just a regular greyscale image) would do. Gives you 256 levels of grey, and if the pit is 256m deep (which it isn't), you have a step of 1m automatically. If it needs to be stepped you can even try in Photoshop to add these levels somehow, but in TG a strata shader will do that just as well.

[Oshyan]

What does the source heightfield actually look like? Is the area around the mine black or white? Is the mine itself described in positive or negative height terms? In other words if the mine is described in *white*, it will displace upwards, causing to you have to try to offset it to sink it down, but this displaces all of the heightfield including the black "0" point, which gives you that square sink around your terrain. If you want this to be entirely cut into the terrain, and the mine area is described in white, I would suggest just inverting it... I think using Heightfield Adjust with only Multiply Height enabled and a value of -1 works (though my math(s) is not great ).

If that doesn't solve your problem, maybe you can post the actual heightfield or a screenshot of it so we can see how the heights are described.

- Oshyan