I have no idea about saw dust but who knows....it may work. Surely there is an undiscovered substance out there that will do the job and very cheap.

belkins456, it sounds like our seepage problems are very similar. Pond fills then leaks back down. In my case, that it is about a 2ft vertical range from where it is almost full to where the seepage stops. I originally thought my problem was on the bank/dam face but now I'm not so sure. It could possibly be the preasure on inside toe of the dam which forces the water under the dam. Just more to think about.