It's leaking at the top seal where the diaphragm is located. I put a new diaphragm in it and water still seeps and drips. I am working as a service plumber. I'm trying to see if there's any tips or tricks to repairing these without replacing the whole flush valve.
If it is a Sloan Royal, a leak there shouldn't be a problem. Try this, put a bit of grease on the threads on the inside of the cap and make sure there is no pressure build up while your putting it back together. Don't overtighten.