The county did provide a complete explanation of the shutdown: they found unacceptable levels of e. coli and total coliform. They believe because of mechanical damage and surface contamination of the developed spring, but they can't fix it because they can't trace it. The rest of it, diminished flow, moving springs maybe developing a new one may be perfectly accurate, but its not the reason the system was shut down. Isn't less water better than no water? So no diminished flow isn't the reason. Anything other than the contamination is just smoke.
Salty, you are correct to isolate the two issues:
1) Contamination: We don't know for sure if it's "surface contamination" or if the groundwater is contaminated. Actually, they could trace it, and they should trace it, to identify where its coming from. Most likely its surface contamination, but this should be determined. If its the groundwater and related to human waste practices, it will likely show up at the new spring eventually.
2) Diminished flow: Salty is correct in pointing out this does not cause contamination, but it could make it more likely to accumulate or concentrate. In any case, it affects the solution - does it make more sense to rebuild a spring that's decreasing or develop a new one that's increasing? Do you leave the old one there in case the flow comes back?