The packing really needs to be packing and I doubt you can get an O ring the right size to fit over either end. You can go to a plumbing store and get string packing. I believe HD and Lowes have it too.
The original felt packing was put on before the gland nut and the pointer. It is one piece. Some older kits had a felt packing with a diagonal split.
How tight are the vanes to the walls?
If they are not super tight then you much expect to use very thick oil to get the right action. There is a noticable difference between a very tight vane and one that has a very slight amount of wear. At least in my limited experimenting.
Do not try to play too much with your balls too much. They are not much fun to play with unless you have some help. They likely just need some cleaning. If they are rusty then the shock is likely bad anyway. Minor pitting is not good as it will allow the fluid to flow past the vane.
Keep in mind there should be a few pound weight at like 2' that takes like 20 seconds to fall down. Lighter oil (I did not have heavier oil or the correct information) in a "loose" shock is like 7 seconds. My definition of loose is likely extremely tight in other peoples minds, probably like a couple thou clearance.
With a shock arm and the valve all the way down it should be really hard to turn the shock. Noticably easier, but still tough in the other direction.
