Kohler diverter leaks

I have a jacuzzi with a high flow kohler faucet and a diverter for a hand-held shower.

Water leaks from the diverter when the tub is being filled through the spout. When the diverter is pulled up (water divertered to hand-held shower), there does not seem to be any leaking.

Does anyone know what this could be caused by?

Also, there is a set screw hole plug that is difficult to get out. Is there a trick to this? I'd prefer not to ruin it.

Thanks.

Did you ever get a reply to this? I have a similar problem with a Kohler Diverter, which leaks in both positions