I disassembled the fuel pump this morning and there's nothing wrong with the diaphragm. I'll give Holley credit for making it thick and durable looking even if it is a POS. Since I don't see anything wrong with the diaphragm, I'm going to get another fuel pump. Based on 383Ram's suggestion I looked at the Carter fuel pumps on Jegs and the Jegs fuel pumps on Jegs. Knowing that Jegs re-badges stuff from other manufacturers I thought they looked remarkably similar. Have a look and see for yourself.
http://www.jegs.com/i/JEGS/555/15960/10002/-1#
http://www.jegs.com/i/Carter/180/M4891/10002/-1
The Jegs is $54.99 110 GPH @ 6.5 to 8 PSI with a 3/8" NPT inlet/outlet. And would reuse the 3/8 fittings I already have.
The Carter is $77.99 and rated at 120 gph @ 8 psi 1/4" outlet/inlet.
What do you think?
And one more thing. The Jegs has a pretty Chrome finish instead of aluminum finish like the Carter- you know that's an important factor for making HP.
