Am I leaking Air? (well, not me--my well)

Just drove a shallow well in my basement. 1 1/4" galvanized. Hit water at 20'-21', continued to about 27'. Developed the well with a hose run down to the end of the pipe. Used a pitcher pump to bring the water up to the check valve, then hooked up to a cheap 3/4 hp pump/tank combination. Besides the check valve there's a union, an elbow and three nipples.
This is my first experience with well driving (that I remember). I should also confess also that the point is a big-box unit (Northern Tool). Times are tough here at the hacienda and I'd hoped to keep my cost under $300.
I calculate I'm pumping about 5 gpm, which I don't know if that's good or bad, but I'm also pumping some air bubbles. There's not much air--when I run the hose into a bucket, sometimes it's hard to see any at all. If I turn the output down a touch, they stop.
So, am I pulling air? Is there any chance I'm not all the way into the aquifer? Any chance this will stop on its own?
I heard about the Saran Wrap technique for finding a leak on the suction side, and I've tried it, but it doesn't seem to indicate that any of my joints are leaking--those above ground anyways.
Should I live with this? Pull the pipe up and start over? Need some sage advice.

Thanks, Brewmaestro

You could be drawing air at the point.

Stopped by a local well driller's shop this morning. He thinks I've got a busted sandpoint based on two things: 1) I'm only getting 5.5 gpm, and 2) when I developed the well, I had a cup or so of gravel come out of the well. Some up it a 1/4" in diameter. He thinks the bubbles I'm getting are the pump 'pulling the water molecules apart' and giving me air. He suggests I try to run a hose down into the sandpoint and flush it out. If I can get down into it.

So now I'm really in a quandary. I've got a well that seems to work okay, albeit at 5.5 gpm. But should I be satisfied with that? I've been around long enough to know that sometimes you should leave well enough alone. But if I can pull this pipe and start over, maybe I should.

Opinions, anyone? Thanks. Brewmaestro.

Take the air until you have bigger problems.

Sometime when a point isn't deep enough overpumping can pull in air. I doubt that the point is broken because you would probably be pulling sand. If the pumping level is great (over 20') you could be causing cavitation of the pump (may sound like the pump is pumping gravel). Sometimes when pumping from a high lift (suction) the pump seal can let some air around it. Personally I would hook it to a pressure switch and tank and let it go. If it presents a problem (air in the system) add another well and point some distance (as far as possible away from) to the existing one.

Thanks. I decided to run it as-is this summer and see how it works out. Thanks for your advice.

Beermaestro

A couple things:

A) I would highly recommend a cartridge filter with a clear bowl after the pump system.
B) If you think your fittings are leaking, Saran wrap works and so does shaving cream. It's hard to hear vacuum leaks when a motor is running. I think your problem is in the well though.