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Yuck! Looks like someone used silicone sealer on it? Or was it just a really cheap o-ring not suitable for higher heat applications?
I would be temped to get a better set of o-rings, clean it up, and try it again.
No sealer! Just really cheap o-rings. I’m sure the metal spacer is fine and better o-rings would do the job, but I bought the forge spacer for peace of mind.
Right now I’m on vacation in Florida, but I was able to return the turbosmart valve and I have the forge spacer and upgraded oem valve waiting for me when I get home!