I'm all for playing this as written, completely in the open, and relying on my players to separate IC and OOC knowledge. I think you can play with things like dramatic irony and encourage players to roleplay the temptation that way if it's all out in the open.
Andrew, I like the idea of playing this in the open as well. I think, if you do, you give your players the opportunity to leverage OOC knowledge to contribute to the game in a significant manner through their character's reaction to the situation. If you take the roll and/or OOC knowledge away, your run the risk of missing an opportunity in which player agency can drive the narrative forward in a meaningful manner.
That said, the mechanics can feel somewhat transactional at the table. This can disrupt both immersion and narrative flow which, as I think about this some more, was the impetus behind my initial post. As I said, this was the first time I had someone roll an eye upon finding a hoard. It was also a first for the player. As Loremaster and player-hero become more familiar with the mechanics, I think rolls and decisions will go smoother and roleplaying the situation will become more natural.
All in all, I think the magical treasure system in
Rivendell is leaps and bounds ahead of the old school "You found a +5 Vorpal sword" approach. It takes some getting used to, but the integration with character and narrative makes the system yet another powerful storytelling device as opposed to a simple boon or curse. This device provides the opportunity for good roleplaying. The challenge of getting right is implicit and, I think, will work itself out as it becomes more familiar to everyone at the table.
All of the above, of course, is based on my style of play and what I think works well for my current group. I can definitely see the merit in the other approaches mentioned in the thread.
Thanks for a lively discussion!