stephen, I could be wrong, but did the packaging say anything about dual flush? When you say diaphragm, do you mean the rubber flapper that raises up when you flush? Some of the designs are meant for dual flush toilets-- basically it means it drains only a little when you press the lever down once briefly. That is usually enough to clear liquid only waste, but the second flush requires you to hold the lever down to let it empty everything. It's something that is supposed to conserve water so you aren't doing a full flush every time just for liquid only waste.
I couldn't get the .pdf file to load so I couldn't look at it.
Another thing-- which you may have done already-- when you take apart the flush valve assembly is to clean it thoroughly. I have high sediment in my water and after about four or five years it had gunked up the flush valve so the toilet kept running. I took the flush valve assembly apart and cleaned it then put it back together and replaced the flapper (which was a bit warped). The new flapper requires me to hold the lever down for longer in order to get a good flush, but was the one recommended for that toilet (a Toto Drake).
$350 to replace the flush valve assembly? WTF? Ok, I'm not a plumber nor do I play one on TV, but *I* can replace a flush valve and I am a total uncoordinated monkey. There are videos on youtube that show how. And a lot of the times you don't even need the new full assembly (as I said before, sometimes you need to clean it).
I can't load the video right now because of ISP restrictions, but here is one
. Just look up "how to replace flush valve assembly" on youtube.
The steps on one of the vids was so easy that I was able to follow along easily and take mine apart and clean it.
Another thought has to do with the flapper (if that is what you replaced) and the length of the chain. Perhaps you need to clip the chain so it is a bit shorter and will lift higher when you flush?
As for the bubbles, I'm not sure what to say on that but sometimes running water until the bubbles clear takes care of it. Not a water-saving friendly way though. I'd have to defer to the experts on that one.