I have had two briggs engines that had one piston shatter, and it kept running, and sounded normal. Of course, that is just my experience.
Since the pump is leaking from the head, there are three places usually that it has to leak, in order for water to come out from between the head, and the Dry end of the pump.
Water is either going around the piston, or it has bad packings, or through the piston, the seals on the end of the plungers are bad, or a piston is cracked, so these are the three options that you have to choose from. You said you rebuilt the pump, I assume that to mean that you put in new packings. I would pull the head and do a quick visual to see if the packings have somehow been damaged in the installation. You can quite often either see or feel it by sticking your little finger in and runing around the edge. If there is nothing there, and since one of the retaining washers was missing, I would go ahead and replace all of the retaining washers, and the o-rings on the ends of the plungers. While you have the plunger out, you might as wel inspect them to make sure that they are not cracked. You will need to look at them really close to see a hairline crack. Put it all together, and make sure you use the proper tolerances, because you do not want to crack a plunger, and see if there is a leak. If there is, there might be something even more troubling wrong, and it is time to spring for a new pump. That should also take care of the pressure drop.
From the description, if the guage is on the pump head, you have a flow unloader, and if it is on the unloader, it is a pressure unloader. That being the case, the answer to your problem is different for each one. I would bet that if you get the leak taken care of, that it will solve a lot of your problems.
ANother thign that you will want to check is the valves. Pull them al out, and suck on the end of them. If you can easily pull air through the valve, you need to either take out the blockage, or replace it, if you can't see the blockage. This can really have an effect on the pressure.
Just some of the stuff that I have dealt with before.
Scott Stone