well from what i gathered from my bike, YES you do need 2 o-rings because there were two in my bike. However one of mine was ripped ih half so that is probably the cause of my leak and i can about guarantee that yours is caused by a MISSING o-ring! so that is good news for you and me both. From what i have learned and seen i think that the lip seal can be removed with a seal puller or something of the sort and pressed back into place with a socket. Probably not the "correct" way to do it, but it would work. It does sound like both of our problems are orriginating where the o-rings are in place as those are what do the brunt of the OIL stopping and the lip is more or less like a dust seal similar to the dust seals on your forks. In conclusion, thanks for all your help and i'm glad i could give you the answer you were looking for as far as your problems were concerned.