I, do think the dam was done correctly it was cored to rock. I think the problem is the rock that was uncovered in the middle may have fissures which is showing up on the back of the dam.

I do agree that 1/4" leak is not too bad, but the leak was 1/2 inch at full pool, I guess all I'm trying to get an answer for is the change in loss due to head pressure of the lower water level or is something else happening, possibly sealing itself?