I cannot imagine what kind of a chemical would do that, you dump it in a pool skimmer, and it will seek out the leak? Sounds odd. The leak is obviously in your liner if it goes beyond the jet. When it had gone down to around 1' above the bottom, did you inspect the area where the water had stopped? Or do you feel that the water may have still been leaking?
What would be wrong with getting a new liner? That seems like the next option if you cannot find the leak. Boy, it could be small and hard to pinpoint that is for sure.

I just have doubts about the product is all, I cannot see how it will work for you, I think it is mainly for the plumbing part of the pool system. Especially if some of the piping were to be underground. Sort of like a Bars, StopLeak for a Radiator.