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I have a '49 Deluxe Eight coupe with the R9 overdrive which has a steady drip from the electric solenoid on the right side of the unit. I purchased new seals from Max Merritt; there are two paper gaskets for the unit and a third, o-ring style seal which goes around the OD plunger. Here's my question: should this o-ring be coated in grease or any lubricant or should it be installed dry? The reason I ask is that when we installed it dry, the unit continued to leak at the same rate as before. Many thanks for your guidance-

In my opinion a bit of lube on the seal is warranted the first time it slides over the plunger to prevent any abrasion. During use oil will be deposited on the plunger to keep the seal lubricated but that won't be present the first time it slides over when damage could occur.

Another thing is to make sure there are no burrs or scratches or excess wear on the plunger which could damage the seal or provide an area where oil could pass. Also check that the spacer between the solenoid and OD case is flat and making a good seal with the paper gaskets and that the spacer is oriented properly when installed with the small holes on one side going toward the rear. If it has been put on backwards it could have bent.

In conjunction with the spacer orientation, check that the solenoid is positioned properly with the single terminal 7 at the front. Goes without saying but a reminder since so many have had issues with solenoid installs. Make sure the plunger is extended when the solenoid is installed so that the ball on the plunger end can easily and positively be inserted in the slot on the pawl. Preferably done electrically so nothing mechanical will mar the plunger surface.

If the replacement seal is a typical modern style lip seal make sure the open side is positioned toward the OD so pressure of the oil will tend to force the lip tighter against the plunger rather than be able to push oil between the lip and plunger.

Wouldn't hurt to double check the oil level in the OD and trans is not too high and no excess is being forced out.

Is there a vent on that tranny? Seems like I remember one,
if so maybe it's plugged or restricted.

A good question on the vent. Don't recall one on the OD case but there is one on the trans. OD oil is mixed and shared with the trans via a couple of openings thru the adapter piece so I believe the trans vent serves both. The vent is a hole drilled thru the length of one of the cap screws holding the top cover. It should be protected by a crimped on sheet metal cap over the bolt head and is probably on the passenger side of the cover toward the rear. If that cap came off and the hole filled with dirt etc it could be blocked.

The far more usual problem is that the adapter plate is no longer flat so that the gasket seals to the trans. You will have to carefully bend it back to normal.

Mine had been filled with goop. It sealed and worked.
I've since replaced it with one from the flackmaster, but I left the spacer sealed to the OD and just replaced the solenoid proper with a new gasket.

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Mine was leaking really badly as well. I removed it and to my surprise the previous owner had the plate on backwards (didnt think this was possible). The plate was no longer flat as mentioned by Ross, I flattened it out, added in the new oil seal, and hand cut some new gaskets.

Not taking the sound advice given here, I attempted to reinstall WITHOUT energizing the solenoid. I was/am inexperienced and was worried about no appropriately engaging. I fought for more than I like to admit. I finally did energized the solenoid and had it set within the key on the first try. What a fool I was not to listen to the experts here. Lesson learned.

Has been working great since.

Thank you to all for the advice and especially to you Howard - it turned out the solenoid surface was not flat and so not making good contact with the transmission case; the paper gasket was insufficient. A slightly thicker gasket made the difference, and after a mix of highway and city driving...not a drip yet.