BT,
If the area had been declared a "wetlands" either I would have had to create a wetland of equal area to compensate for the one which would be destroyed by the pond construction ($$$) or the permit would be denied.
The stream was not diverted, it is the inflow for the pond. The ACoE stipulated that I could not disturb more than 350 lineal feet of the stream bed so in essence I flooded 350 ft of stream bed by building the dam. The stream by the way is quite small. In the wet season it's about an inch deep and maybe 2 ft wide.
Get yourself a USGS topo map of your location and look to see if your stream is shown with the dreaded blue line. If it isn't the going should be easier.
Cecil,
I believe a free flowing stream, especially if is was "named" or "classified", would be much harder if not impossible to have permitted.