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Hi all. I'm going to be running the prewritten "A Troll Hole if Ever I Saw One", from 'Tales of Eriador'. If I have an Elf of Lindon in the party, they have the ability called 'Elven Skill' that essentially gives them a magical success twice a day ( their Prof bonus). According to the 'Magical Success Examples' on page 20 of the rules, if said elf makes an Insite roll, they can read surface thoughts of anyone around them. The problem with that is in this adventure they can instantly figure out what's going on ruining any mystery the villan has. There really in no way around this, unless I railroad the players, which I don't want to do. Any thoughts?

First, keep in mind that Elven Skill gives magical success equal to Proficiency Bonus and it resets after "a long rest" (not exactly after a day).

Usually, in every game i've played (including, for example Call of Cthulhu, Forbidden Lands, etc.), we try to limit the insight skill to sentences like: "he might be suspicious" or "he might hide something" and not telling openly if the NPC is lying and the specific information about he is lying. The opposite, that is telling exactly in which sense an NPC is lying, can easily derail the adventure every time players meet a hidden villain.

Another option, and maybe I am wrong understanding the rule, it's applying a contest between the elf player and NPC. The player would have a magical success but there could be a possibility for an NPC to roll for Charisma (Deception) so he could tie the contest.

Reading surface thoughts is not the same as deep thoughts or reading memories. At any given time, the target of the Insight may be thinking about food, personal comfort, the weather, relationships, plotting against enemies, any number of things other than what the elf might want to know. It might even be "Why's that elf squinting at me like that?"

It might even be "Why's that elf squinting at me like that?"

Yes! That one!
And if he can use the skill twice the second insight would be "Huh, he's doing it again."