Jim
It does have the ring of failed seals, although it could be the valve itself as the springs do go weak and the valve can have wear. If rebuilt with the correct factory parts they should last near enough a lifetime, usualy they rot with old age rather than wear, when we used these guns in the days when they were state of the art they rarely failed.
I've heard that some of the so called web "experts" use cheapo non standard parts, and revel in making their own modifications, but the original is best, and most parts are still available. The only lube should be done at build and last the life of the system, oiling will cause more problems. It may be dirt in the valve if its been oiled, take it apart and see, if you can see no deteriation or damage, clean it and rebuild it dry, it may sort it. I've done a couple of LGR's which is a similar sytem and the easiest way to fix them is to replace the valve as a unit ( about £25). Speak to Bill, at the contact I gave earlier.
Best of Luck
Robin
Walther KK500 Alutec expert special - Barnard .223 "wilde" in a Walther KK500 Alutec stock, mmm...tasty!! - Keppeler 6 mmBR with Walther grip and wood! I may be a Walther-phile?