I've never heard of anyone adding too much gypsum. I believe that it does not significantly alter ph in most cases and so that is why some prefer it to Alum especially if they do not feel comfortable using Alum and then having to monitor ph and buffer if needed. The pond bosses here who are experienced with this I think would say that Alum is very effective, but that you have to be a bit more knowledgable and careful in its use. Using too much Alum can cause a big enough ph change to endanger your fish. So, I am not sure that you have to be all that cautious using too much gypsum...except to make sure that it is powdered and not pelletized. There is a warning post about using pelletized gypsum elsewhere in this section.
The second caution, if you can call it that, is that you have to use so much gypsum (In my case about 2500 lbs for a 1 acre pond.) Distributing it becomes an issue. Some people wash it out behind a prop in a stationary boat, some throw it out one scoop at a time by shovel, and some use a trash pump and pre-mix it with water and then spray it over their pond. Anyway that you do it, it can become a pretty good job.
Because there are several possible causes of muddy water, I think it is important to test your water in jars. If gypsum does not work well, then you have not wasted much time and energy and you can quickly change your strategy and try something else.
I am not an expert at all on muddy water either. Most of what I have written above came from others' posts here and a few papers I have read from a variety of conservation departments and other resources on the Internet. I will be interested in hearing how you solve your problem because I am still reading and experimenting to learn more so that I can improve my water clarity too.
