Recommend a Cannondale headshok service resource

Doesn't look like there has been much if any water ingress which is good.

Whether the damping dial can lock-out the fork depends on which version of Headshok it is. For some versions (e.g. the first 'type 1' forks) it is possible to fully lock them out; although the advice I got from a former TF Tuned mechanic is to avoid riding the fork whilst locked out as it puts extra pressure on the internals increasing chance of damage. For other versions (e.g. Fatty 50) they are not designed to fully lock out.

The Sheldon Brown service manual (https://www.sheldonbrown.com/cannondale-headshok/headshok_service_manual_en.pdf) details this for each variant plus also explains how to set-up the damping dial if it currently isn't giving the right range of damping.
 
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