When I moved to Texas, I was suprised at how easy it was to do what you wanted on your own land. No permits, no building codes, no real restrictions other then common sense things like septic systems and dumping regulations. No permits needed for a pond unless it's 90 acres or larger. At that point, they want some sort of engineer to stamp the design of the dam to certify that it's not going to fail.
As to why a pond leaks in Southern Alabama, the list could be fairly extensive. Since it leaked all the way to the bottom and is totally dry, it sounds like a soil issue. Clay with some amount of sand in it is a good thing. Too much sand is a very bad thing. Without seeing pictures, but guessing from what you said, my thought is that there is too much sand in the soild.
A real simple, easy test would be to bring some water into the pond and pour it out. Does it pool up? Does it soak into the ground? It should just sit there and not go down at all.
Another issue might be in how it was built. Was a bulldozer used to dig it out? Some dozers have a very light footprint. They weigh allot, but the weight is spread out over the tracks and the actual preasure they put down on the ground is less then an automobile. My dozer weights 40,000 pounds, but my 14,000 backhoe will sink several inches into ground that I've worked with the dozer. It feels solid to walk on, but the weight on my backhoe tires is concentrated, so the tires actually put more preasure on the ground then the dozer. It is possible that if a dozer was used, and the soil is questionable, that the soil just isn't compacted to a solid enough level to hold water.
Do another test. Dig out a shallow area of the pond with your tractor. Drive over that area repeatedly. Over and over again to make sure that area is supper hard. Then pour water into that spot and see what happens. If it holds water, then you might be able to fix this with proper compaction. If it still leaks, then you will have to bring something in to seal it up.
Clay needs to be about two feet thick to work. This can be very, very expensive unless there is a job somewhere that is looking for a place to get rid of it. Bettonite is the favorite cure all for leaks because it swells up when it gets wet and plugs all the little leaks that are in the soil. This needs to be working into the existing soil and compacted. Depending on the amount needed, this can also be very expensive.
When I dug my big pond, I hit an area of sand. I removed the sand and replaced it with four feet of clay. If I had left that sand there, or ignored it, my pond would leak to that level. There is also a chance that with a sandy clay soil that there are seams, or veins of sand in your soil. If you can find something like this, it would be very easy to dig it out and fill it with clay. The same is true for gravel or rock. Both are very bad for a pond, and need to be covered in several feet of clay. You don't mention finding rock, so it's probably not there. Sand is what I'd expect is your problem.
Tree roots can act as tunnels. It's a wild shot, but did you remove allot of trees and where there any that might have a root system that could be affecting the loss of water in your pond?
Contact your Ag Extension and find out where you can get your soil analyzed to see what it's made of. People use generic terms for clay all the time, but there are over a dozen types of clay in just the most basic terms. There are all sorts of different typs of soils and it's always in layers. Be sure to look real close to find out if you have different layers of soil types and have them all tested to see what they are. You might have good clay up high, and bad clay down low.
Good luck,
Eddie
