Neal,
Firstly sorry to hear about the lost fish; I am always gutted when this happens as it's a dead cert the lost fish would have been (1) a new PB (2) a new club record (3) a great photo opportunity!
Re these schoals showing I have experienced this with 3" scad. Switching to small hookais and shrimp rigs can get you some great live bait! The mackerel are below them as are the bass........you can bet on that!