That compound is not going to last for very long imo, I personally never trusted it. I bought the 3m kit when doing headlights on my celica, did every step except the last one. I did not rob the compound but instead I clear coated my headlights. It looks and feels brand new.

 

Try using Adams Polishes !
Works great when i have done a couple of buddies Evo headlights .

 

Like the OP said, "when you pour water over it, it looks fine". Well the polish is like water, it's fine for some period of time but then it become yellow and fogged up like it was before. Clear coat will make it clear like glass and last like OEM headlights.

 

Ive been doing this for a while , with good wax's it keeps them clean ...
Never had an issue with it coming back , i personally dont like aftermarket clear coats on them because it tends to peal later on .