Re: the leaky air spring.
I can't find the manual for this fork anywhere but I did find this diagram (
linky) on Pace's website (
http://www.pacecycles.com/manuals-exploded-diagrams/).
I have to say, these are rather interesting. What is basically inside there isn't that different to the Pro Class II's which came the next year (and which I have 2 pairs of). The big difference is that the Pro Class II's do away with the air spring and have a different spring stack with another 10mm of travel.
As far as I can see, when you pump up the air spring what you're doing is pressurising the bottom of the fork leg. There is an extra seal (number 37 on the diagram) which holds the air in and sits below the external wiper seal (36) which is there to keep all the mud and crap out of the fork.
Now if the air spring is leaking, there are 3 places it can be getting out. One is into the damper cartridge which sits above the air spring in the upper legs of the fork. You can spot this easily because if air is getting into the damper then that means oil has to be getting out. Frankly this is unlikely.
The next possibility is around the valve at the bottom of the fork leg. Again this is fairly unlikely as it should be well sealed.
The finial possibility is that the air is escaping between the lower and upper fork legs through seal number 37 on the diagram. IMO this is by far the most likely. This seal is moving up and down every time the fork compresses and is quite close to the external seals so is going to be vulnerable to any mud and rubbish that makes its way into the fork. As the fork is 15 years old this is quite likely going to be dirty.
I'd try pulling the forks apart (I'd be happy to tell you how to do this if you want to do it - it's actually quite straightforward), giving everything inside a really good clean, applying a load of fresh RC-7 grease and seeing if it holds. If you can pop the air seal out without damaging it, give the seal and the space in behind it a really good clean too.