The wound is healing and it is a young tree so it should survive this if it is not fertilized to death. It will not however survive going into the ground like a telephone pole. I would guess this is planted at least 6" to a foot to deep. This will kill it a long time before the wound. Since you have to dig it up anyway to replant it you may as well get a new one.

I'm sure it wasn't planted too low, the top of the root ball is above ground and I keep the mulch away from the trunk. So you think it will be ok? Is there anything I should do to protect the wound?

Thanks
-Mike

For the wound just take a sharp sterilized knife and remove all the loose bark back to where the bark is tight to the trunk. And no wound dressing. As for depth. It still looks from the photo that the tree is deep. People are told to plant to the top of the root ball, and if the nurseries were doing there job properly this would be correct. Unfortunately the plants in nurseries are usually cared for not by plant people but by minimum wage employees.
If the plant was potted and went through 3 pot changes and was planted 2" too deep each time that would be 6".
If it was field planted then it could have been too deep in the field. Then the digging and wrapping of the root ball can further pack soil too high around the trunk. Leave this for a season in a yard and roots grow into the new soil making it appear that this is the root collar. From the picture this appears to be the case, so you need to find the root collar. That is where the trunk flares and the top of the first major roots join it. It is a small picture so I could be wrong but check to make sure this is not the case.

Thank You

I've been thinking about what you said regarding the planting depth so I did some searching and found good pictures and videos of what the correct depth should be. I carefully removed about 6inches of top soil to exposed the main roots. Can you tell from the pics if this is the appropriate depth? I will widen the area if so but wanted to see first. Will this do anything to help the tree? I have 4 others that all will need to have this done and I really don't want to replace all of them if this has a chance of working long term.

Thanks

Here is a link that might be useful: images