Hi Luke - your post caught my eye so I thought I'd try answering some of your questions - I would take these answers as thoughts on the subject, rather than edicts, btw...
"Are crater gardens meant to ever fill up with water completely like this?"
By whom? I won't speak to what Sepp wants out of them, but I thought I'd let you know that before the Central Valley of California was flattened by Green Revolutionists, it was pocked all over with such things. In the natural world, they are called vernal pools
. They are basically a tragically endangered habitat that provides for a very unique variety of native plants. We can emulate them ("crater gardens" ), and put plants of our own choosing in place of the natives. As such, an "artificial vernal pool" would certainly hold water for a time, and would exhibit concentric rings of different plant species, the rings shaped by the differing water needs of the plants used.
An interesting idea might be to dig a REALLY DEEP hole, then fill a lot of it with wood, then top it with soil. So, you have a concave hugelkultur bed. I think this might be of use in very dry environments.
"I have read that earthworks are all supposed to be somewhat leaky, that there isn't really such thing as a completely water tight natural pond. Is this the case?"
"supposed" is really a matter of who wants what. However, the short answer is yes, this is the case. Even if you did manage to completely seal the UNDERSIDE of a pond, it would be tricky to completely seal the top!
"Or should I really expect to be able to create something natural at the bottom of the crater garden that will hold water year round?"
In a Med environment, where for most of the year, evaporation is greater by far than precipitation, creating a pond (small year-round body of water) is difficult and uses up a lot of water. But ponds are pleasant; one possibility is to seal a small portion of the very bottom of a depression; you could end up with a "vernal pool" of sorts, that had a lot of space that was seasonally flooded, with a small area in the middle that always stayed wet. Again, though; maintaining water exposed to air in a Med environment can be water-expensive.
"This year I decided to bury the liner of a hot tub to the very bottom of the crater garden/retention basin. It is in the middle and holds about 300 gallons of water. In this way I'm hoping to keep a water ecosystem year round at the bottom of the garden so that when the entire garden floods again the following winter I will have an ecosystem in place ready to colonize the new water to prevent mosquitoes from breeding. Then in the summer when the majority of the crater garden is dry I'm planning to use it as a sun trap and fill it with annuals such as melons/sunflowers, etc?"
This sounds like a pretty cool idea, to me - clever way to deal with the mosquito issue, & a small water area like that, with depth & not as much breadth, will cost you less water to maintain in the dry season. Really, yes, I am excited about this idea.
" Did you listen to Paul's podcast about the earthworks in San Diego? It sounds like this pond eventually drained out during the summer as well. If anyone reading this is familiar with that project I'm curious to know if they intend to find a way to keep water in that space year round, or if the best thing to do is to let the water just gently leak out?"
I was in the workshop, but I can't recall if the desire was that the pond portion hold water all year. I - yes, it WAS; I recall we spoke a lot about sealing, and there was tractor work compacting the inside. As I mentioned, though; keeping water exposed to air in habitats where evap > precip is fundamentally wasteful (er, unless you are going to set up a water-based food system the production of which justifies the water use...) - Personally, I don't remember getting the impression that there was a plan to make seriously productive use of the standing water; I think it was mostly a matter of how we most all of us love to have water bodies around. I may be remembering this wrong, however. Also personally, just for the sake of sharing a slightly different perspective on the installation, I would have wanted a pond, too, and expected that I might have to give that up, and also, I would have preferred the pond to be more central to the property, rather than right by the road. So I would have put the swale in off the road, & the pond at the end of the swale. I see a few benefits to this: If it worked out as a pond, it would be visible from several points on the property. It would draw in animals to the center of the property as well - I like animals! The center of the property was also a shallow ridge, so I would have created a situation that soaks more water into the soil, right on the potentially driest portion of the property (that I could get the water to; elevation is an issue... as is where the pond is placed relative to other structures - in case the wall blows out!).
but I digress. I also think that as time passes, the clay in the base of the pond as is may soak, swell, & settle more, & biotic material will be growing & rotting in the water... I think it will be better sealed in a few years than it is now; it may well end up holding water a lot longer, with minimal input. Finally, when it comes to conserving water in such a dry environment, letting it soak through the pond wall into the surrounding soil is great.
"In a small pond like this that isn't regularly fed by a stream what would you recommend to keep the water alive/oxygenated? A small solar bubbler/fountain? Reeds/aquatic plants? "
All good ideas. The problem with a solar fountain is it doesn't work at night, so you need one that can run via battery at night. Likewise, plants tend to release less oxygen at night, so free O2 can drop seriously at night. Of course, if you are low on fish et. al., this may not be a problem...
Really just scratching the surface here; I hope a few bits of this are helpful...