My DIY CO2 is connected to an airstone in my tank, which causes the bubbles to scatter and move up over my filter. the filter shoots the bubbles across the tank as the float upwards to the surface. (As shown in pic below)
Is this okay? is CO2 actually being dispersed in my tank?
You could always give a limewood airstone a try. Mine produced a very fine mist but I still did put my limewood diffuser under the intake of a powerhead which worked really well.
Edit: Your picture just loaded and I realized that you have a submerged filter. As stated above, it would be easier (and really effective) just to feed that into your submerged filter and you could even use your airstone inside the intake for a really fine mist, though it isn't necessary.
I'm not sure how your filter is configured but take a look at the directions here and see you can modify it slightly to work with your filter. I am currently using that to diffuse my Co2 and it has worked the best of anything I've tried!