System info: sub pump with check valve between water line from pump right before the tank tee, tank is a in pit that is about 6 feet from the well head and 20 feet from the house. The pressure switch is a 40/60 and is new as of the end of May 2016, the tank has recently been correctly pressurized and does not show any signs of air leakage. A copy of the original drillers report is here:


Issue: Occasionally and more often after a high use call for water, the pressure drops to zero and the pump keeps running with no PSI increase.
To correct the issue: I cut pump power, wait 2 to 10 minutes and turn power back on, the system re pressurizes to normal and the pump shuts off usually within 120 seconds
Frequency of occurrence: Started about September of 2015, happened about once a month but has been slowly increasing currently happens 2 to 3 times a week.
Normal Function observed: Cycling with water running: Pump stays on for 40 seconds and off for 90 to 120 seconds
Sound: Frequent grinding noise, often sounds like it is pushing a lot of sediment, Also Hammer noise more noticeable in colder temperatures
Newer sound: at the point where the water comes in the house, i can hear the water flowing during a call for water, this is a new sound that was not there before
Sediment level: Always has been high, i will install a filter soon but have not yet. I have to clean out the washing machine screen filter at least every 4th load.
Failure Observation:
I start viewing the gauge/pit set up with high call for water(washing machine rinse cycle) at a time when pressure is between 40 and 60 so pump is off. Pressure drops to 40, pumps kicks on, pressure gauge needle bounces erratically and gasping noises from tank occur, pressure gauge seems to briefly rest at 20psi and then drops to zero, the pump is still running, the pressure does not rise.
I cycle power to pump and watch, within the first 10 seconds I hear a rush of water and gauge jumps up to 40psi(How could it get from zero to 40 in 10 seconds?) then it takes about 90 seconds for psi to get to 60 and shut off. Then we wait for 15 seconds and turn the washing machine back on, seemingly strange observance here is that it takes a full 5 minutes and 15 seconds to drop from 60 to 40psi. Then it seems to be back to its normal cycling, except the pump on time is slightly longer than normal at about 60 to 70 seconds.

So what could be the problem(s) here?