Why and by whom was there a yud added to make "ירושלים" instead of the original "ירושלם"?
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My concordance (Even-Shoshan) reports that there are only four places in Tanach where "Yerushalayim" has the yud between the lamed and mem. One is in the book of Esther ("who had been exiled from Yerushalayim"); once in Jeremiah ("v'samti es yerushalayim le'iyim"); once in II Chronicles, and I don't recall the last one off the top of my head. But look it up in a concordance.
Presumably no one went in and "added a yud" in those places -- that was the way it was supposed to be spelled there, for whatever reasons.
(Note that the Aramaic name for the city is "Yerushleim", which wouldn't have a yud; and we say the name "Yerushalayim" may be a compounding of "Hashem Yireh" and "Shalem", which would again explain why there's not usually a yud.)