DE in sand filter?

[Poconos]

Carl is right on. Your pressure drop when you add before your 'sock' in the skimmer indicates you're blocking the suction. I'd add the DE, let it get trapped in the filter, then put on the sock. The 1-2 cups I've mentioned in other posts is for my 300# sand filter. Can't emphasize enough to go slow at first and wait maybe 20 minutes to see where the pressure stabilizes before adding more DE. For some reason it takes a while to stabilize after adding. Probably as the DE works into the nooks and crannies of the sand. And yes, your pump is way too big for that filter. The good thing is if DE isn't getting blown back into the pool and the pressure stays up, it indicates the high pump flow is not causing channeling in the filter. That's where high flow will basically cut bypass channels in the sane, negating filtering.
Al
BTW: Welcome to the forum.