Sounds like you may have a leak somewhere in your plumbing too. When the pump shuts down, the water should just remain in the pipes.
Think of it like a hose from one bucket to another. When the hose is filled with water, the water will flow from one bucket to another until they are the same level. The hose does not drain down. If you take this same hose and put a small hole in it, it will drain down.
Likewise, if your pipes have no leak, your pump basket, filter, heater, etc, will all remain "flooded" (filled with water). A leak will allow air to enter and allow the filter "stuff" to flow backwards. In this case, DE.

Are you seeing air in your pump before the pump starts back up?

To add to Waste's reply, the DE should coat your filter element and cling to it. If you have TOO much DE, the excess DE will not have anything to cling to, and can tend to drop off the filter element, and as Waste said, without the backflow preventitive check valve to stop it from heading back to the pump basket, will appear as the cloudy water.
Adding too much DE will reduce efficiency.