Actually, the inner O-ring is not required. Its an extra O-ring we include which helps to keep the valve's lock nut from loosening from the inside if the user were to rotate the valve counter clockwise. However, it can causes sealing issues without the perfect amount of torque applied to the locknut.
To overcome the issue, we actually recommend that Brew Bucket users only use ONE O-ring between the valve body and the exterior sidewall of the vessel. So there is no need to use an O-ring on the interior between the lock nut and the inner sidewall.
The key thing to remember it so ONLY rotate your racking valve clockwise.