Any chance on a diagram here? On the surface, based on pressure from the city supply, it sounds like a check valve in the wrong location or corresponding wrong location of a connection. Also, not sure of your tank outlet/inlet arrangement. Doesn't seem like it would be possible to have both a breather line and pump suction both off the tank bottom. I would recommend you make a diagram of all your lines, pump, tank, valves, then flow paths for each. That should show you where the problem is.
This probably doesn't help much, but if you post a diagram may be of more assistance.
Good luck -
Greg, Karen and the kids (choc. lab and golden retriever).