I will go with method two and put a sub panel at the pump house.
I understand keeping neutral and ground seperate at the pump house what I did not consider was grounding the green ground wire at the pump house.
Since I have a plastic well casing I will opt for the $12 ground rod and clamp.
I solved the problem with the Ditch Witch even though the clay is so packed it seems like we are digging into concrete. Problem is now my 26 yr old son and 25 yr old SIL may not speak to me for a week. You boys want water..... get to work.