83 KZ750 Shaft rebuilt petcock woes...

I got a new petcock rebuild kit. K&L part number: 18-2723. I installed it, and it acts like it isnt even trying to shut the fuel off. It leaks out on reserve and On and of course prime. I have the new diaphragm in it, the new lever oring, and the new rubber spacer with the holes. I even tried to stretch the spring out a little bit to see if it wasnt holding tight enough. Is the oring on the little plunger supposed to be IN the fuel hole, or just against it? Ive attached a pic of how the plunger seats..

The diaphragm plunger o-ring is supposed to plug that hole. To view the action of the plunger on my 81 650, I have to remove the petcock screen & look in from above or remove the lever. Applying suction, I can see the thing move. The o-ring contact surface probably needs to be real smooth. I polished the surfaces of the petcock body w steel wool & brass wool. At the plunger hole, I used a big phillips screwdriver to press the wool agains the surface. I also polished the gasket surfaces on the other side & on the lever. Mine was in good condition, w no pitting or scratches or anything.

This won't be much use most likely, but here's a spare petcock I cleaned up w PineSol.