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>To me, the explanation that lower layers have been compacted and now block the water seem pretty reasonable.

The simpler and more likely explanation is that you have a clay or otherwise mostly impermeable substrate.

In fact you SHOULD have a layer of clay between the surface and the ground water you are drinking. You don't want a fast path between surface contamination and your well water.

You want a compromise. You need water to get to the well somehow. It needs to get there fast enough to replace what you use, but not so fast that it isn't filtered first.

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