The holes don't appear to be near the dam but opposite the dam. The water is about 4 ft deep right now at the dam so it is hard to see if there are any holes but we haven't found any on the bank on that side of the pond. That is why we suspected the crawdads because the pond was filling up until the water rose to the the area where we were finding all these holes. But we might indeed have another problem with seepage around the dam. The soils report we had indicated a potential problem with the soils in the bottom of the pond, thus we had walked in some clay and compacted the entire bottom with a sheepsfoot. The dam appeard to be constructed well, so we did not do anything with the dam. Perhaps that was where we went wrong. There is a rock shelf about 8 feet down below the bottom of the dam. We are thinking about digging down to the rock shelf at the dam and filling that with clay and bentonite. We used this same technique on the other side of the pond to isolate a marshy area from the rest of the pond and it was worked beautifully.