Thank you very much for the info. I'll run a hose around it and see if I can see anything. I might just go get some bentonite. You said two feet deep, but how wide should I dig away from the well?
I am not sure whether it is a fault in the bed rock or a leak around the casing. The guy that drilled the well has a reputation for poor work (wish I would have known that then!), so I suspect that the casing was not seated properly, or deep enough.