I'd imagine the very old cave in the story is the drystone-built souterrain that's in a rocky outcrop on the west side of the hill (it's marked as a cave on some old maps).
On the Hill of Clogherhead there stands a very old cave and it is said that priests lived in it in the Penal Days. The priests in this cave had a terrier dog. One day the solders were around the cave and the priests were saying Mass at the time. The dog started to bark. The soldiers heard it and came in and killed the priests. There are two stones inside this cave and every seven years the stones move a little bit closer together.
From the Schools Collection of the 1930s, currently being transcribed at duchas.ie. Are the stones the soldiers, or the priests? or maybe either? And why are they moving closer together? Too many questions.