Ben, thanks for the recommendations. After working with my installer I've decided to do the following:
Change out the 1.5 HP motor for a 1 HP 2 speed motor with the proper impeller.
Change out the existing T104 timer control for an Intermatic P1353ME electronic control to handle the on/off as well as the timer duties. It fits in the existing Intermatic enclosure box so that simplifies things a bit.

In the meantime, my water has been getting clearer. I'm keeping the FC >10 as you mentioned. There has been a little bit of settling by leaving the pump off overnight, but not a lot.
I've been adding half a solo cup of DE after backwashing and it settles around 1-2 psi increase after about 20-30 minutes. After just a couple hours it increases to 5psi and it's ready to be backwashed again within approximately 6 hrs when the pressure has increased approximately 10 psi. The DE trick does work, but its' a slow process. I'll get there.

I really appreciate the help on this topic and will keep updating as things continue to clean up. Hopefully things won't get worse. I'll also post back after I get the pump and controller installed.

JP