well not real sure without a picture what stage the construction of the dam is in but yes it needs to be fixed because it will probably only get worse just as essup describes. Lots of questions as to why its leaking and how to fix it like 1) Is there a problem below core 2) Is this a compaction issue made when filling the core. With you seeing the water surface behind the dam I tend to believe its not below the core but only guessing. I would probably dig into the dam from the backside until I found the source of the leak then go to top of dam and deepen core or recompact it. But again only guessing dam height, construction stage of pond etc. all would have to be considered.
