What county are you in? The only reason for asking is that I am in Schuyler county and could share some experiences I just had building my pond the last two years (see thread On Lassig Pond).

Bentonite is a volcanic clay that that expands 8 to 15 times it size. Great at sealing ponds, wells, oil rigs, making molds for castings, etc. Bentonite must be mixed with the soil and compacted. Doing this is an couple of lifts is best.

As much as it hurts to say this I wouldn't leave the sides of the ravines untouched. I would remove the trees and widen the pond out. Plus you are going to need material to make the Dam from where is this coming from?