No what you just said is not what it needs, do not put a rubber o-ring on it. The top part of the galvanized waterer most likely has a leak allowing AIR to enter the waterer which lets water flow out the bottom. Even if the washer on the little spring loaded valve is bad the waterer shouldn't leak. The only way for water to run out of it is when AIR goes in.
Most likely your waterer has developed an
AIR leak around where the handle attaches to the lid. You can carry it by this but it is not designed to be hung up by the handle(not saying your hanging it). To find your AIR leak, take the top off and turn it upside down and fill the top with water, you should see where the water is escaping and that is where your AIR leak is. Use some silicone gasket maker like RTV Blue silicone, available at auto parts store or auto section of
Walmart, To seal the AIR leak from inside. It will work better on the inside than outside. Wait till it dries completely and refill the waterer and put the lid on. If there are no more AIR leaks the waterer should then work fine.
I tried to explain this the best I could, if you still need more help don't hesitate to ask. The science behind the theory about how these works is the same for nearly all the waterers of this type including the plastic ones as well. Water can't escape the reservoir unless air can
get in. When the birds drink the water down it generally uncovers a small hole or in this case the entire top which allows air to enter, when air enters water escapes untill it covers the hole or top. If it leaks you have to find where air is entering and seal it up to prevent more water than needed to come out.
this is the one I have, 
