I've got an article from about fifty years ago that proposed the same thing, using atomic explosions to go the heavy digging!!!
I remember that article about the peaceful use of atomic explosions to dig a deep, wide, sea-level canal with no locks. Wasn't it in Life Magazine?
My question then was: what about the fallout and contaminated soil the explosions would throw up? Maybe they could do the explosions underground to just loosen the soil. My question today, looking at the map, is would the canal go through Lake Nicaragua? Is that lake freshwater now? Would connecting it with the sea make it salty?