The bubbles go away because the air groups up at the top and is no longer being forced down by the water. Properly bleeding all those bubbles out, then using a piece of tubing attached to the part of the Y-splitter he's using as a fill port gets rid of the bubbles entirely, and as long as you don't let the water levels in the tube attached to the fillport go to low the bubbles stop.
Again, I had this same problem on my res and that is how I solved it. As for that insert suggestion, he used an adhesive to mount the barb, so he can't simply do that. It would be the preferable resolution but its not attainable with the current design.
Edited by ZytheEKS - 7/14/13 at 7:37am