I will definitely try some of the stuff you mentioned. And no the neighbor was not the builder was just around when it was built.

And the pictures don't show the sand stone i am talking about. its out more in the real loose material that you sink to your shins/knee in. nasty smelly stuff right at waters edge in the pictures. If i dig out in that that's when i hit a bunch of that rock about 8 inches deep or so.

And the grey dirt does pack well seems to have a lot of clay structure to it. But i am also finding small roots (looks like corn hair) very small and also some tree bark. When we dug the hole on the back side of the damn and after about 30 seconds we could see water start trickling out and running down the wall. so im pretty confident its leaking thru that layer of grey dirt. But could it we taking that sand stone and then dispersing through that ? I dont know i just hate to put this much money in it and have the same problem. I also really would hate to fill it in because we use it so much. Im just alittle nervous to rebuild the whole damn and its all stemming from that rock.

Also when i say it leaks a garden hose a day thats at about 1/2 to 3/4 full. once it gets full it goes down pretty quick i assume because of the pressure.

Thanks again any advice is greatly appreciated