Shake the valve, it should rattle. There really shouldn't be oil there, but some is possible.

Just a slight amount of oil, nothing crazy. It does rattle and the O ring appears to be fine.

I smoke tested this thing and found the leak. Everything is all good now. Thanks everyone for your help.

Question on your motor swap.

So did you use a NA short block and swap over you top end? IE: Heads, intake, blower ect ect?

If so how does this effect the running with the compression diff between the two motors?

I have the same year ssei that spun a bearing so i'm debating a total rebuild or swap. Prob is SC motors in this part of the country (if you can find one) are running 1500+ with HIGH miles o them.

Thanks in advance....

Don't know how I never saw this response. I've been playing clean up on my unanswered posts. I did not use a NA block. I actually got a SC motor from my boss and just swapped that. I had to use my top end tho because the intake was a little different.