Legal Question in Real Estate Law in Illinois

While you may get lucky and have an attorney answer who has handled a similar case, I think it is more likely you will need to consult with a local attorney that would be willing to examine whether adverse possession may apply. You should seek an attorney that handles matters in court, but is familiar with real estate issues. The attorney will want to look more carefully at how you have been utilizing that part of the property since 1974. The neighbor's use of their yard may be an interesting element to consider. The longer the shed has been there the better, but there can be other considerations even if that has been only a few years.

The metal pipe probably was placed there by a surveyor, and probably marks the corner of the lot. Easements are not marked like this; it was more likely on a plat of subdivision when all the lots were created, or if your lot and their lot at one time were under common ownership and yours was spun off the easement was created for their benefit. The type of easement is of less importance than who it serves and for what purpose, and as long as it is "of record" (subdivision plat or created by deed) can't go away without the consent of the party(ies) it serves. So someone will have to find the actual easement grant and determine what its purpose is, and then decide how it might be handled. Because it sounds like it is inside your yard but serves them can be confusing, and if it serves no current purpose there may be a chance that by placing the face where it is your neighbor has taken action that may have abandoned it. An attorney who deals in title matters can help.