Timmie,
Correct me if I'm wrong but when the water drains out of the pump basket, does it happen when you push on the valve handle to switch to backwash? If so this is probably normal. Think about what happens and thre effect of gravity. When you push on the handle you open all ports of the valve assembly and air can enter from the backwash (or waste) port and gravity will let water drain out of the pump basket back to the skimmer. Just turn the pump back on and it should prime and start pumping. Sounds like you changed equipment somewhere along the way and I'm not sure what that red handle is.
Al