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According to ARB, this leaking is an installer error, of the o-ring onto the ARB shaft. Basically, if that o-ring twists any when being installed, it'll fail. You have to be extra-special careful in sliding it on, so it doesn't roll any. It was a PIA when I installed my ARB, but then again, it hasn't leaked in over a year and a half, so I guess being careful has it's advantages.

Don't know if this is totally true, though, as I would think the o-ring would virtually un-roll itsself back to its natural state, w/in a few minutes. So this could just be ARB's way of covering their arse... Blame it on an install error....
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I installed the arb in my rear axle. If those o-rings are in anyway deformed they will leak. When I installed the slip ring I made sure the o-rings were lubed up with lots of oil and grease then slid them onto the carrier very very gently.
According to the shop that installed my locker in June 2004, ARB changed the design of the seals to make it easier for more people to do the install. They actually stated that they preferred the old design. I am not familiar with the designs, as I did not do the work myself. I am thinking that the O-ring problem was the first design and that our problems arose with the second. The shop that did mine is the one that is recommended by ARB for the install in my area and is a custom drivetrain shop that has been in business for over 25 years. The shop where these photos were taken also appears to be a very reputable and experienced business. It would appear to be more than a coincidence if the installation itself was 100% of the problem. The fact that ARB covered 100% of my work both times and replaced the unit the second time indicates to me that the sealing problem is a touchy issue.....and (credit where credit is due) excellent customer service.