Answer: Few plants can survive in rocky hardpan. The addition of organic matter improves heavy clay soils; your plan of action really depends on how much time and money you want to spend. You could have the entire area tilled up, adding lots of compost and manure. You could spread a layer of topsoil/compost over the entire lawn, and reseed. These are all quite expensive options. If you'd prefer, you might try spreading a thin layer of compost over the entire lawn, let the existing grass sprout up through it, and reseed bare spots. If you can continue this practice over several years, you may be able to build up the organic matter in the soil sufficiently to support a lawn, without a huge capital investment. If you can aerate the lawn before spreading the compost, using either a hand-held (or shoe-mounted) device, or rent a gas-powered machine, you'll go a long way toward providing a better soil environment and thus a healthy, happy lawn.
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