All kinds of ?'s

We're new to the pool scene and have had a bunch of issues this summer, most of which have been resolved but they keep coming so any help would be greatly appreciated...
My friend bought a house that has an 18 x 36 inground pool with a vinyl liner two water returns, one in deep one in shallow... hayward top mount sw256t sand filter with a 1 hp motor
After finally getting all of the leaves and debris out, replacing the sand, putting on a new multi port (sp0714t) and standpipe/ laterals assembly, we have noticed that the spider gasket is being chewed up when we change settings (filter to waste etc). Also if it is on FILTER water will drain out of the waste pipe. Is there something wrong with the multi port? Is it just a bad gasket? We put a valve on the waste line so we can close it off and no water will drain while the filter is running. Should this only be a temporary fix or will everything run okay with this setup?
NEXT question, our pool is clean but cloudy, we put in 7 gallons of shock and a few days later after little or no swimming in it we can finally see the bottom, which has some dirt on it. We vacuumed tonight on waste with the water returns closed off and the skimmer basket closed off as well and got the shallow end and slope to crystal clear. however after we backwashed and rinsed we took out all the plugs and turned the filter on and it seems like all the dirt that we vacuumed out came spewing back into the pool through the water returns. Are we supposed to leave those open when vacuuming? Any help is appreciated, thanks again

hello, and welcome to the forum!!

If you have water draining from the waste pipe while on filter mode, it is very likely that the multiport was put back together backwards, and it needs to be turned around. If that's the case, then just plugging the waste line won't be enough to make the filter run correctly, because the water isn't going where it's supposed to go in the other modes, either, as you can see when you turned the filter back on and blew all the dirt back into the pool. Also, when you change settings with the handle, are you making sure the pump is off, and only turning it clockwise?

Also, please post a current set of water testing results taken with a drops-based kit for us to look at. We also need to know exactly what all you have put in the pool meaning ingredients and not just product names of "shock." What is the volume of the pool?