What is it with Corally and their part numbers, and/or dimensions - always being wrong?
Personally, I set my shocks for little to zero rebound.
Wait for the bubbles to rise up out of the oil. It helps when shock caps have bleed screws, but when they don't, the cap can be loosened as the shaft is pressed up into the shock body and then tightened back up before releasing the shaft. It's one of those jobs where it feels like you could use a third hand!
Getting each pair of shocks the same is more important than zero rebound IMO.
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According to AI, slightly pull the shaft up before tightening the cap to create a slight vacuum that compensates for compression. This ensures zero rebound.
As for o-rings, obviously, unless they are exactly the right size, stiction will alter the feel of the shocks and essentially change the damping.
My understanding is that silicone o-rings are known to be the lowest friction option. Use of green slime helps ensure longevity and reduce leakage.
My Baja's IRC shocks have umbrella seals, which are known to be extremely tough and leak proof, but they're not as smooth.