From ASPCA, Animal Poison Control Center:
"Background: Cocoa bean shells, a by-product of chocolate production, are sold as mulch for landscaping. Homeowners find cocoa mulch desirable because it degrades into an organic fertilizer and provides an attractive color and odor. Unprocessed beans, derived from the Theobroma cacao plant, contain 1-4% theobromine/0.07-0.36% caffeine whereas, cocoa bean mulch contains 0.19%-2.98% theobromine. Some dogs find the mulch attractive and eat small to large quantities."
"Conclusion: Dogs consuming cocoa bean mulch may develop methylxanthine toxicosis. Retrospective case data suggests clinical signs following ingestion include vomiting and muscle tremors. Although oral doses could not be quantitatively determined, clinical severity increased with increasing qualitative dose descriptions. Therefore, treatment should be directed at controlling clinical signs until recovery and preventing further exposure. Pet owners should avoid use of cocoa bean mulch in landscaping around dogs with indiscriminate eating habits."
I had long heard that chocolate was bad for dogs, never knew why exactly but never had any desire to let my pooch have a bite out of my Mounds bar either. Apparently more than just the chocolate itself is bad for them!
The link has a bit more data and suggests that death is quite possible if enough is eaten by ones pet:
http://www.aspca.org/site/PageServer?pagename=pro_apcc_publicationscocoa