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Hi John -
I think of you every time I enjoy my head rests - thanks! And thanks for the helpful information. Interestingly, there is no reference in the Haynes manual to a seal where you say it is. There is an exploded diagram of the distributor but nothing like a seal, just some felt washers. (Are those what you are talking about?)
I found the post from June 26 and copied it to my Volvo 740 file for future reference. Now all I have to do is find time and patience to take a look at this situation. My goal will be to replace the seal. Simplest way to go; everything else seems to be in good shape.
Thanks again!
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