Edz, Funny you should post about a pump problem as I have just come in after installing a fire pump on the river to wet the weeds and even I sometimes have trouble and I have 25 plus years of plumbing experience doing pump installs on rural/ outer urban properties.
Sounds like the pump is cavitating when at the mention water level ( tank pressure)is equalised and so not pump anything but air bubbles.
In my experience you need 2 non return valves installed
1 at the base of lower tank as a foot valve
2 another. on the outlet of the pump ( you can get away without this one if it is an open end pipe at upper tank but if that pipe is under pressure then NRV)
Unless you haven a jet pump or a foot valve you will end up with cavitation with out the above.
Also is the discharge end into the upper tank pipe end free flowing or under pressure?
Also my suggestion is always have the pump closest to water source preferably as a flooded suction with NRV but if it needs to lift and suck then I would try and located on top of tank and use a jet pump like this
http://irrigationdirect.com.au/product/self-priming-domestic-jet-pump/Now back down to the river to sort my problem ( pump cavitation a bit and resulting lack of flow, time to fit a NRV on suction hose but I'm not paying Bunnings for one)