Ok Todd, I think I am starting to visualize what you have going on there, and it is a bit different than what I was originally understanding.

This whole sand seam is below where the pond bottom will be. You hit the seam digging the base of the core trench(keyway?), which is below the pond bottom. I would proceed as you are, and get that sand out so it doesn't mix in with the dirt you will pack back in for the core. I think if you completely cut across that seam, much like you would a drain pipe, seal it all off with packed clay, it will prevent any water from getting thru. Now on to what might happen as result of this.....

That water that is going thru that sand seam will be stopped( if you pack that core properly)and will back up and be released out the next available easy passage way. You may not ever see where that might be. Pretty hard (impossible?)to see underground and know where every empty/weak spot is down there. To take advantage of this, I would follow that sand seam up past the pond. Say 50' past the pond. Get a guy that knows how to tap into that, and you might get an artesian well going. If there is enough pressure from that water source, it may come up all the way to the ground surface. Then let that flow down into the pond. This will prevent the water from going backwards out of your pond, which would be the case if the sand seam would be connected to you pond basin in some way.

When you pack that core and all that water is stopped, don't be surprised that it may find a weak spot and find its way into your pond. Those are the spots that you will then have to think really hard about plating over and fixing before you let it completely fill. You will probably have to start pumping the water out to get it fixed. To help with that, you could then get the artesian well set up. It might come up the well and you can divert it with drain pipes till you are done with the pond.