Old post, but wanted to put my theory out here. I have a brand new o-ring, positioned correctly, very very light film of dialetric grease (my choice for o-rings in this application) with the hatch sealed, unmounted from the kayak, placed upside down on a level surface (small office trash can in my case), then I poured water onto the underside of the hatch, up to the inside frame top and the seal still leaks. I can't really measure if any less than my original o-ring but it looks like it leaks about 1 cup per hour.
My theory is a combination of the shape (circle) and the gauge/thickness/type of material. I think a circle might lend itself to a higher chance of contact issues (shifting/warping/thermal-expansion/contraction). I feel a rectangle of thicker material, possibly nylon might reduce these contact issues. Sure, first generation hatch (mmiller mentioned it) had more issues than current generation and current generation has more issues than future generations. So with that, I'll say reluctantly because I hate this phrase...it is what it is. I think my hatch has deformed slightly over time.
For dry storage of my wallet, keys, phone I did this:
https://youtu.be/aZ47ekpONEE?t=200
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