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I have recently upgraded frames to an older yeti 575, which has a 2009 Monarch 3.1 on it (not stock, I know). Initially, it was leaking quite a bit of air from the revolving valve stem. I tightened this up, and I don't think it is leaking air from there anymore. It is still leaking air; last nite it lost about 50 pounds. Also, when riding on it, the lockout and damping features don't seem effective, and it seems to blow through its travel fairly quickly (using 80 percent of its travel off a 1 foot drop). Also, when intentionally releasing large amounts of air, I get shock oil coming out of the valve.
I am trying to decide whether or not I should rebuild it or not. Does the shock oil in the valve indicate a blown seal? If its likely to function properly after the sixty or so dollars for the rebuild (seals plus oil), then I'm happy. However, I've heard some negative things about these shocks leaking even after a full rebuild, in which case it might be better to put my money towards a new shock. Any insight would be much appreciated!
 

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I know you stated you looked at the valve stem, but have you looked at tightening the air swivel? That seams to be a common area for leaking. In the 2010 models they changed the connecting bolt on the swivel to be a hex head (I have one on my 2.1) from one that had 2 flat sides.
 
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