Mike, I dont even know how to thank you enough. For several months I've been battling this darn leak, I spent over $1000 in parts and labor, and endless hours of my time... All this effort to fix what wasn't broken.
I was already considering either trashing the bike, or getting a whole new motor, the former option being heartbreaking and the later being wallet breaking.
All this just to see your post, and one o-ring and three easy to access bolts later the leak is gone. Ten minutes of work at most, and everything is bone dry. Rode it today for a few hours, came back home - everything is bone dry, no dripping.
I am a bit disappointed in the mechanic that replaced my starter, he should've known better when he didn't feel any resistance from the o-ring, but it is what it is. My baby is bleeding no more, and I'm just happy to ride it again!