Or, Denny...maybe he's not even using the "O" ring that goes with the cannister...maybe that's what you meant by NG? Anyway, I assumed he was in a '98 S70 (like my car) that uses the metal filter when I posted earlier. From '99 on, the oil filter was changed to the plastic cannister with the wooden & paper filter inserts. I have this on my '04 as well and like you mentioned, the "O" ring HAS TO have some oil rubbed on it to hold a seal, and then go in the grove near the end of the threads of the cannister, on the side that you hold on to when you screw it in. I hope the original poster finds the problem...it could be very frustrating if every time you change your oil you can't drive your car due to constant leaking and fear that you'll end up with a "dry" engine...which of course means the engine will lock up and have to be replaced.
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1998 S70 T5 Emarald Green Metallic, 2004 V70 2.5T Ruby Red, Previous Owner of Black '94 850 Turbo Wagon. My cars have been running so well lately they've got me worried.