More confusion...
1) Who is demanding payment, your sister or the person who sold the chest to her????
2) Was your agreement that your sister purchase the chest on your behalf and that you repay her????
3) What agreement, if any, existed??
If the chest is the property of your sister and you were to make payments, then it is still hers and she has every right to demand payment or return. Your attempt to side-step the issue by making a public possesion claim won't stand. It is not yours, you apparently agreed to make payment and now are trying to keep the item without payment.... pretty low-down if you ask me.
My suggestion:
Quit your being such a petty person and grow-up. Though this transaction was with your sister, you need to handle it professionally. Contact her (in writing if you have to) and restate the repayment terms. Also, detail the payments made and what you are proposing to do to pay off this debt of YOURS. If you can't make the payments that you agreed to, be a grown up and return the cedar chest to her.
Bottom line... you can make all the published or private claims of abandoned property, etc. but you will still owe the debt. Your sister could take you to court and you will lose. You will then owe her the balance, plus attorney fees (if any), plus court costs, plus interest.
Is your relationship with your sister worth losing over such a petty issue????