OK, maybe I am looking at this wrong, but when you say that there is "dust floating around" how is the dust floating around if there is no water. I coudl be completely wrong on this, but are you sure there is no water. Or is there any chance that it is 100% full of water, and because there are no air bubbles or gaps, that you cannot tell if there is water or not?
You also say that "Usually when I run the filter there is no water in there". 100% of the water should be going through the filter basket, I think. Of course I coudl be way wrong on this, in which case, I apologize, please ignore me.
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Also, am I looking at your pump wrong?
I am going to make 2 assumptions
1.) I am assuming that the fitting on the wall of the pool that is lower is the return, and the one that is higher is the skimmer.
2.) I am assuming that the flow of water should be as follows:
a. Water goes from pool into skimmer
b. Water leaves skimmer and goes to pump
c. Once in pump, water goes into the skimmer basket.
d. Water goes through skimmer basket and exits pump
e. Water enters multiport valve
f. Water can go either into pump and then back to pool, or straight into the pool.
If that is correct, then I think that skimmer and return are hooked up wrong.
But as is above, I could be wrong, and if so, I will use this as a great learning tool.