Mickey, did the air in the pump go away?
You installed the new gasket correctly (as long as it went in flat), sounds like the old one was somehow installed sideways , which may have been the cause for any air in the pump. As for a chip off the corner, as long as it doesn't extend to the 'rib' on the cover you should still be able to fully seal the lid, unless it's a front corner and prevents the locking knobs from creating a full seat. I can't blame you for wanting to use up the Baq you had, that stuff isn't cheep, but do give a read like I said above. If you want to switch to a chlorine pool next year, I think the vast majority of people here would tell you that you are making a GREAT choice. As for salt water systems, I really like them and so do quite a few folks here. What you'll need to do (anytime between now and next spring) is to look into the SWG (SWCG) section of this forum, and see if it will be the right thing for your budget and pool (there should be a few 'cost analysis' of whether the unit actually saves money vs a bleach pool (it has a fairly high 'up-front' cost, some chems are still required to maintain the pool, cells need to be replaced periodicly and it costs electricity to run one) - but even so, the yearly cost will probably be less than a well maintained Baq pool. I've babbled enough for one post - if I can be of any further help, never hesitate to ask!