1) Do you all think a full tear down should be done?
No. If you have tons of algae in your tank, then it could be taking all of the toxins, and pollutants such as Nitrates, Nitrites, Phosphates, Ammonia, etc. out of your tank. You should either find a aquarium shop that'll test your water, or buy new test kits and test the water yourself.
2) What type of substrate, and how much, goes into the refugium?
I would advise going for a Aragonite for the tank, and a type of mud for the refugium. What brands are available to you? How much you stick into the regfugium depends on the space you have to work with.
3) what type of lighting over the refugium?
Any power compacts, or t5, HO fluorescents with a rather low Kelvon rating should do. A lot of people advise the Home Depot Reflector with a Daylight spiral bulb but do make sure it doesn't short out due to salt creep/deposits from splashing from saltwater.
4) How do i get water running into the refugium? I was thinking a very low flow pump, from the skimmer compartment into the refugium, which would overflow in the return pump compartment... Also, there is a black bulkhead on the refugium, maybe that has something to do with it?
Can you raise the skimmer and drill a hole into the refugium wall so that you can just overflow the water into the refugium? If you use a pump, there could be a chance of one of the compartments overflowing. We need a well lit picture of your refugium.
5) lighting questions, right now i have 2x 250 halide bulbs, and the ballasts for 4x 55w PC's. Do I actually need to add those other bulbs? if so what kind?
No you don't need any more lighting then you have. The PC bulbs I would assume were for Actinics? If so, Actinics are mainly used for aesthetics and nothing more.