Air getting in the filter can only mean one thing - leak on suction side of pump, air leak anywhere else and it'll be water getting pushed out the leak.
if it's not the strainer basket or low water level, have you chacked all connections between the skimmer and the pump - this is the ONLY place you could be drawing air from.
in answer to your recirculate question - nothing should change since you are effectively bypassing the filter and just pumping water from the pool through the pump and valve of filter (valve only) back into the pool.
Have you got a bypass chlorinator on the system - these usually connect into teh main lines before the pump and after the filter, the air could be getting in before the pump - check the stainless clamp to see if it's tight enough.
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