First, let me say good job handling this underwater. Never easy dealing with these scenarios.
A couple of thoughts.
1. I don't do the "turn back" deal. Valve is either on, or off. Period.
2. Pre-dive is the same ALL THE TIME. I got sloppy with this on dive 2 of 3 in class a few weeks ago, and it nearly cost me. In that pre-dive, valves are checked. If you are in the habit of putting them all the way on, or off, there will be NO ambiguity during the regulator checks.
3. S-Drill before every dive. Period. And test the reg underwater. This step helps each team member become familiar with each other's regs. Had a paniced diver on my hands in class when she was passed a Poseiden for the first time and didn't know where the purge button was. When she found it, she got a MOUTHFUL of gas and wasn't prepared for it.
4. DM was remiss in my opinion, but had probably resigned himself to tag-along, since the lead took such an active role. If you are in a team of three, you need to ACT like a team of three. Not a buddy pair+1. Involve the third diver to a greater extent than just signaling OK every 20ft.
5. Feelings be damned, if you are about to do a dive with someone you dont' know, find out their training and experience. Your life could be on the line with them. If you had gone OOA, could the #2 diver have acted properly? If you don't know the answer to this for sure, you have something to ponder. Would you have done a shallower dive knowing this?
6. While I know this is not a DIR forum, one thing about DIR descents and ascents, is I really like the idea, when possible, of descending and ascending facing each other. It makes it FAR easier to read people's eyes and motions when you are looking them in the face. In class a couple of weeks ago, I was #2 in a team of 3 (group of 5) and we were doing a descent in an area where we could not face each other. It was about a 40ft drop on an angle. The lead got out of trim started fighting, and paniced. I saw her lose trim and start to fight, and I moved in immediately. By the time she grabbed the wall for comfort, I had my hand on her BC. She was facing the wall, and I turned her to me. I was eye to eye about a foot apart. I held her hand and made signals for her to look at me. Once she fixed on me, her breathing calmed down. I waited a while, until she calmed down, then signaled OK, and she confirmed it. We did the rest of the dive without incident. The eyes tell the story. Look at them if you can.
7. Fix problems at depth if you can. One thing you did not mention here. The diver had an OOA at 70ft at the beginning of the dive. The diver did not panic. Once the diver had gas and calmed down a bit, was there any attempt to try to figure the problem out? Doing this with a new diver might be more risky, but you said you didn't know that. Clearly, without a leak of massive proportions, the diver had plenty of gas in the tank as you had just begun the dive. It should have been somewhat obvious that there was either a regulator problem or a valve problem. Perhaps fixable, perhaps not. Just wondering if you tried to find the issue or not.
