pump chatter

We recently replaced our pump, its a shallow well pump about 330ft and we redid the piping from the holding tank to the outside pump to the pressure tank. Our problem is we have something that sounds like switch chatter, where there is a rapid on off cycling of the pressure switch and the motor. WE have completely drained both the pressure tank of water and air, and the cut in psi is between 38-40 psi and cut out is 58psi. I can't figure out the problem and how to stop it. Also how do I know the pressure tank is good, that the diaphram isn't ruptured? Any help is thanked and needed. Currently the chatter affects our power to our house and daily living as it makes us nervoius to run the water. Attachment 37527 (http://www.doityourself.com/forum/attachments/wells-sump-pumps-septic-sewage-systems/37527-pump-chatter-pump-config_01sept14.jpg) Thank you again for any help or insight. Luke