The ball valve stopped the oil leak. The valve is installed up high near the key and even that height does not stop the fluid from the steering return line from draining into the wet clutch area.
There must be a worn part in the system allowing for the leak. And maybe it is the sealed starter unit. But, as other have done I've replaced the sealed starter with new and also carefully rebuilt the original starter and it still has a slow leak after it sit for 3-4 days.

So, now I have installed a ball valve into the steering return hose. I clamped off the hose first, to make sure that stopped the leak.
I installed the valve high up on the firewall for two reasons. One was to clear the peddles and make it so the handle protrudes into the foot area to remind me to open the valve prior to starting the engine. And secondly, to possible break the hydraulic lock that is siphoning the fluid through the system when the forklift is off.
When I cut the hose to install the valve hydraulic fluid flowed form the hose and that told me that there was still hydraulic head present. That would create the siphon effect.
I'll run the forklift a few days and make sure that leak has stopped. Then I will leave the valve open and see if the leak starts again. I am hoping that it doesn't because the valve is now high enough not to build a hydraulic head.
I'll let you know.

I rebuilt the original starter with the seal kit and it slowed the drip to about an ounce a day. Then bought a new starter made for wet clutch and that one leaked like a sieve. So, I bought another kit and rebuilt that one being extremely careful to seal everything. And that one has the 1 ounce a day drip too.
I'm not totally convinced that the seal kit is capable of holding back oil if the nose is submersed.
The bell housing empties when the forklift is running, but slowly drains back in to the bell housing submersing the starter nose after 4-days of sitting. It would be fine if I used the forkift every couple of days, but I rarely use it.

That probably has a sealed starter which means the seal inside starter nose housing is bad or someone put on a dry starter instead of a wet one

The forklift still leaks. I thought that replacing the steering return line and placing a loop in the hose would be the fix. The hose in the service manual photo shows a loop in the hose that I presumed was there to break hydraulic suction or head pressure. I made a new hose and installed the loop just like in the service manual. While I was in there I rerouted the hose that goes from the hydraulic pump the the steering. Now both the hoses are routed higher than the fluid reservoir and I thought that would do the trick
So, now I clamped off the steering return line that goes to the chain oiler and the jet pump and the leak stopped. Just like the other poster said when they placed a ball valve in that line.
So, now I am going to give in and place a ball valve in the line and move on with life.

I may be the only person interested in this thread, but I will continue as an archive for others that may follow.
Maybe the rest of you gave up and junked your forklift or placed the ball valve in the steering return line? Not sure, but I finally think that I have this fixed and feel very confident. Today is Thursday 7/9/26 and I am going to let the lift sit over the weekend and recheck for leaks on Monday afternoon. That's 4 full days and if it's going to leak it will do it by then.
Stay tuned and I'll report back.

I'm back again and the saga continues. I had resealed the original starter and that took care of 99% of the leak. Then I had the smart idea to replace that starter with a brand new one. That was a mistake. The old one had lots of wear and wasn't rebuildable and the engine turned over slowly using many amps. That why I decided to get the new starter. The new one with the seal factory installed leaked like a sieve. Fast forward a couple of years and fixing the forklift is the last thing on my want to do list. And I removed the new starter, bought a new seal kit and made sure everything was tight like a submerged submarine. See Photo. Installed new and freshly sealed starter and it is 99% fix now. That means it has a slow drip about 1 every 3-5 minutes. Well that adds up over time I I still need to have a catch pan under the lift while it sits more than 4 days. It appears that 3-4 days is the time it takes the oil to feed back into the bell housing. So, like the rest of you, my jet pump works and quickly empties the bell housing, but the steering return line that lubricates the chain is allowing oil to slowly fill the bell housing after the lift sit and submerges the starter. The starter is sealed so well now that the only place oil could possibly pass would be the armature shaft seal. I don't think these lifts were meant to have excess oil in the bell housing and there's some commonly failing seal that is causing the back flow from oil head pressure. The reservoir is higher than the jet pump and chain oiling pump lines and that allows the fluid to feedback into the bell housing. So now I need to crawl under the lift and look for the fitting where the jet pump line and the chain oiling line split and plug the oiling line and see if the bell housing still fills with oil. If it does the jet pump leaks if it doesn't it's filling from the oiling line. I will then be able to place a pressure relief hydraulic rated valve in the line and get this resolved. If anyone has discovered the line that leaks please let me know and shorten my journey for me...

The starter motor continued to leak after the fluid was at the proper level and so last week we raised the forklift and removed the starter. I disassembled the starter and found it has rubber seals. It appears that the seal preventing fluid from entering the solenoid and into the nose cone was leaking and the seal that separates the nose from the motor section was leaking. There are 5 seals in the kit. 2 for the solenoid bolt, 1 for the solenoid, one for the plate between the nose cone and motor section and, 1 that seals the armature shaft.
I polished the armature and cleaned the starter. It's a 10MT with a 3 bolt nose and high torque model. I considered replacing the brushes, but they were fine and if I have issues later I'll build one with new parts.
I sealed the back cover with a thin bead of the Right Stuff to prevent only other fluids from entering the starter in case a hose fails.
I reinstalled the starter yesterday and when testing found a hose seeing on the other side of the engine. It was the hose from the pump to the steering. I made another hose and installed that this morning.
This afternoon I have run and extensively tested the forklift raising the forks many times and driving it under a load and am GLAD to Report that there are no leaks.
So, instead of cobbling the forklift with a valve it is fixed properly. I hope this helps someone else.

Update: The kit arrived over the Thanksgiving weekend and my plan was to remove the starter motor and reseal it today. I have the full service manual, but there's no instructions on how to access the starter motor. It's buried and will require jacking up the lift and removing items from both underneath and from the top side. Before jacking up the lift I remove my drip tray from underneath and it was almost dry (just a couple of drops). So, I checked the hydraulic oil reservoir and found it just over full my 1/4 inch. That made we wonder if I had checked it improperly before. I referenced the manual and it said that it should be checked with the fluid hot the forks lowered and the engine off. This makes me wonder if I had checked it with the engine running and overfilled it. Granted the forklift leaked when I bought it, but nothing to say the previous owner wasn't checking it running and overfilling it too.
So now I am going to run it a few times and see if I get any leaks. I do lower the forks and let it run a couple of minutes before turning the engine off. The manual did say that the forklift will spew out the extra fluid if it is overfilled.
On another note the fellow that sold me the starter reseal kit said my S60XL with GM motor has the 10MT GM Starter. In the manual it doesn't show or talk about the starter reseal kit in the starter section. I did find information on the 10MT and a photo of the seal kit and where the parts are installed. With so many people complaining about the hydraulic oil leak maybe this will shed some light on correct fluid level or that there is a seal kit available.

The starter motor is supposed to be sealed. I read that the seals aren't available anymore. Then I searched eBay and found a kit. I am waiting for an answer that it will specifically fit my S60XL. I have the full service manual and it has an exploded view of the starter and I don't see enough seal in the image to totally keep the fluid out. I'll report back if this turns out to be the fix.

to the return line back to the reservoir

Did you add the valve to line going to the filter or is it the line coming from the reservoir?

it was just a standard ball valve off of the shelf. Hope it works for you to.

What valve did you use on the return line? Do you have a part number? Thank you.

We put the valve under the dash so to speak, where it is easy to get to. It is the return line that also powers the jet pump. I am not sure what the full fix would be. This solved our problem and it is an old forklift that I already had put to much money into. As for the sensor I have no idea, not even sure if it has one. You can access part schematic's on line that should help you find it if there is one. Good luck!

Hey man can I get some more info on this, I'm having the same issue and wondering which line to put the ball valve in and what the full fix would be and where the sensor for the oil level because now I can't get the truck to start after replacing the starter

No we just installed the one. And yes a check valve would probably work. And yes this fix is still working! As long as the ball valve is turned off after use

Hi, I know your post is a little old but I'm just curious if you put a ballvalve on the return line by the hydraulic tank fill? Also, do you think a check valve would work? Then you wouldn't have to ever shut anything off but this way it wouldn't drain back.

Well I don't know if anyone cares, but we have fixed the problem! I know it has been quite awhile since the last post here. Please keep in mind the repair of this forklift is not my main function and is very low priority. My hunch that the system was bleeding of was correct. To test this we placed a ball valve on/in the return line from the control valve. When finished with the forklift simply shut off the valve and wonders of wonders no leak!! With the valve in the off position the lift will not start so no chance of running it dry which was a nice plus. And if it is not shut off after use it will only leak oil making a mess to clean up. Since this fix works and I can not see spending any more money on this lift. That is used for maybe an hour a month at most. I am done, if it was used more I would probably replace the valve. To recap what was done when in the shop (not ours) they replaced the starter supposedly 6 times checked the scavenger tube and so on for obstructions. When we got it back we opened it up and checked the venturi and jet pump everything looked good there. Replaced the starter one more time as that is what everyone says it is. still leaked so we opened up the starter and went through the seals saw some weak areas and reinforced them still leaked. Bought and installed new hyd pump got somewhat better but after about four days started leaking again. last installed ball valve in return line and now no leaks. So to be honest I am not sure if the pump and starter was necessary or if it took all of the above to fix it but we are back in business now! I hope this will help someone else down the road or maybe someone has a simple fix for this and I can remove the valve and put it back as designed because right now if you don't know about the valve your not starting it which might be just extra security.

Well we got the new pump and installed it! for four days not a drop leaked. Left Friday night and on Monday morning came back to a small puddle. It has been slowly growing over a couple of weeks now. The only thing I can think of is something has to be leaking/bleeding off and filling the bell housing somehow.