I'm curious how your road was carved out of those boulders on your mountainside in the first place. That's pretty impressive.
It looks to me as if water picks up a lot of velocity coming off the top of the mountain before it arrives at your road where it then starts looking for the low point to continue running down the mountain. Over the long term, water always seeks the path of least resistance. So it hits your road, probably runs down it a bit, and then has started eroding this one particular spot.
The reason the fill failed is because all that wet dirt pushed against the fence posts like 5' long levers that could be only anchored maybe a foot in the ground. This is like trying to build a retaining wall...too much force being exerted against the top of the wall caused it to fail.
If you compare this washout to the other land nearby, the washout is a vertical drop off unlike the section adjacent to it that is more gradual and banked with trees that support the road.
One of the challenges with trying to build up the eroded section is that fill material will want to roll off the mountain.
Not saying this is the way to stop the erosion, but first step would be to try to divert the water somewhere it doesn't continue to wash this soft area away. Then you need to find a way to create an anchor point to lock your fill in place.
Also not sure, but possibly road bed mat could be helpful. Possibly some railroad ties. Not saying these are the answers just yet, but you need something substantial and yet manageable to hold the fill material.
Rocks mortared together with cement to form a solid and sloped rip rap are another possible option if you can establish an anchor point as a base to keep the rocks from sliding off the mountain. Or just add rip rap rock in series of dumps over time without cement if you can figure out how to keep it from sliding.
Seems like a choice between building a very solid vertical retaining wall w/drainage versus trying to add a lot of rip rap over time to the slope?
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