http://www.cultureunplugged.com/documentary/watch-online/play/7568/Watershed-Intervention--Earthen-Dams
hand dug earth dam's that
should sort you out step by step, everyone says bentonite without factoring the cost for the volume you need buy and compact into the soil. It's not something you sprinkle and fill, if you can't afford a backhoe you can't touch bentonite.
Gley lining is
the answer that's probably not ready for you, you've got the structural issues to deal with before dealing with will it hold water. I've been growing catails in bathtubs i dug into the earth, cattails can invade down to 3 feet or grow well in 2 inches.
All you have to do is take that earthen dam
video and simplify it for ponds since the scale is so much smaller.