I think RAH was just meaning alot of them wont even answer a call after they get paid. Sounds like you found a good one willing to fix it. Also it's fine to vent and ask questions. The more minds and experiences you can gather the better informed you are.
Took me long enough to figure out how to shrink the picture, here it is.
Also my contractor and I agreed to wait until the next good rain to see if we can find where the water is going.
I have a very small area (2'x5') that settled the same when my pond was dug last fall. It settled 4-6 inches. Contractor said it was the spot where he took out a 4" plastic drain tile. Contractor is going to pack it in with more clay we have leftover. He also stated he would redo anything if I ever had a problem. He has been really good to work with so far. Your not too far from me, I am in DeKalb County.
I am a geologist, NOT a dam expert, or a civil engineer. However, if that soil was compacted during construction, then it sure does look like you are suffering soil losses due to internal piping.
I think the most common internal piping route is along the outlet pipe - which is why seep collars are installed. You said this is on the opposite side of the dam, so that is not the problem.
Noel's link shows some illustrations of the other types of piping scenarios. Did you have a bed of Indiana limestone underlying your topsoil layers? If so, you may have a fracture open in the limestone. When the soil is saturated, soil and water both migrate down into the fracture. The resulting void makes it easier for additional soil to find its way into the fracture the next time. Hence the "piping" description.
Another possibility is that you are connected to an old drain tile system from when the land was farmed. Did your acreage used to be farm land? If you don't know the specific history of your ground, is there a farm neighbor you can ask to see if he has drain tiles on his land?
You should have cut some of these tiles or pipes during construction if they were present. Maybe ask your contractor if he saw any?
Another possibility is that you have piping occurring into the pond itself. Soil and water is flowing from your bank into a lower level in the pond. If you are able to easily drain the pond, you should see some weird feature or even a mud volcano on the bottom of the pond.
Outlet is on backside of dam and water level is not there yet Limestone - no Even though this was used for a cattle farm (40) years ago - the terrain is was not suitable for grain and tile would have been near impossible to drain, and yes there is a neighbor who knew this acreage and he did not know of any tile.
Contractor did hit sand at 22' depth, but it was sealed. I would not say this is the issue because with every rain event the level goes up and I do not lose level between events.
I am guessing it is the last possibility, because just during the last rain I had marked the water level and the level did rise ~1", BUT later that day when the rain had stopped for nearly 8 hours I noticed the level had risen another 1"
The collapse area grows with each rain event and I have walked around the entire pond several time and do not see a discharge.
As the area grows the contractor is hesitant to do anything.
What would happen if I put tracer dye into the collapsed area, if it is going into the pond would this not show instead of draining?
And last would it be better to excavate now to stop the piping since the collapsed area has not sealed it?
PS: i can stick a 3' rod into the crevice so the cavity is bigger than what is seen in the picture.
"BUT later that day when the rain had stopped for nearly 8 hours I noticed the level had risen another 1""
That is not proof that there is piping into the bottom of your pond. There is always a time lag when water is running through a permeable media. A 1" water rise after 8 hours sounds reasonable.
I spit-balled a bunch of possibilities for piping problems, and it appears that they are all unlikely. You certainly have a mystery wrapped in an enigma!
I looked at your last photo again, and noticed that the collapse feature seems to be following the outline of the pond. One more possibility, is poor initial compaction by the contractor. It looks like he may have missed one strip for compaction right where his embankment ties to the edge of the undisturbed soil a few feet past the edge of your designed pond shoreline.
Hopefully, you have more rain coming. My advice, see what your pond does when it reaches full pool. If it is holding water, then I think it is unlikely that you have a significant piping problem just a few feet beyond the shoreline.
Well we had a good rain event last night and it only traveled a foot the other direction now, What I now see what had happened - the contractor did not complete the pond in one visit, and there is a separation of the core (see picture). So it looks like they did not know where they stopped and started a few feet away when they returned. Also there is a small slide on my pond embankment right where this stops and a pipe formed between the snafu. This is where the sink hole started in the first place.
I also believe it finally collapsed on itself as it really did not creep this time - just sunk another 6" and never held water before. So like what was said earlier in the comments, all my missing dirt is in the pond.
So - I just need to get it dry enough so they can get an excavator here to fix, ah-ha this is why I could stick a 3 foot rod into the crevice there as the core stopped.