Have you tried clearing your cache? When working with design part, its better to disable all caches.

I moved the plugin up the list plugin list and it started working! So can't try this now, maybe it would have helped! The caches are disabled (if you mean the dev settings in the admin settings). Thanks for your help! 

yeah, maybe elgg_dump isn't doing what you're expecting.  When in doubt, I use var_dump($var); exit; and blatantly interrupt the process to see what's going on.

The way you are using elgg_dump the error message would be displayed on the screen. This might be failing due to the debug settings on your site set in the admin section.

Try

elgg_dump("function called", false, 'NOTICE');

This way the output gets added to the log file. Check if it is there. If not, the function quite surely does not get called (for whatever reason). If you see the log entry though, you know at least that it gets called and there's another reason it is not shown on the screen.

I appreciate your help! For whatever reason it still won't fire with the event. Since this was only an excersise I will no longer waste my time on this. If it occurs again and I find the solution I'll post it here! :)