My old Chicago Pneumatic gun did the same thing last year, and it was totally shot (the seals were just gone, you know?). I wasted a whole weekend trying o-rings and lubricant before giving up. Sometimes a leak means the tool's just done, and you're better off replacing it.
Had the exact same thing happen with my old gun. I mean, I fought with it for ages replacing seals and it just never held air right again. Sometimes they're just worn out.