I hate to post this here with all these Iwata guys hanging around, but I'll do it anyway.
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I got my first Badger airbrush about 10 or 12 years ago, and now have three of them. They all have the same air valve assembly, and occasionally I've noticed that when I let the trigger up I'll still get a little air bleeding through. Not a big deal with a double-action brush but a pain with a single action. It will usually go away after a few minutes, but it can be a nuisance so I decided I was going to fix one today.
This page: http://www.badgerairbrush.com/omni%20parts.htm
shows the entire valve assembly as part number T-36, and it is composed of five individual parts.
Unscrew the air valve from the airbrush body and the valve nut (part T-90) will then unscrew from the valve. Be Careful! These are small parts and easily lost!
Once the valve nut is out the spring and plunger will drop out. The O-ring is captive on the plunger. Take something very, very fine grit, a piece of leather or a coffee filter, and polish the end and sides of the plunger (not the end with the O-ring on it, the end that the trigger seats on). DO NOT use an emery board or sandpaper or anything like that. All you want to do is polish the plunger, not sand it down. Use some laquer thinner or mineral spirits to clean out the valve body thoroughly. Smear a little airbrush lube (Vaseline would probably work to) on the plunger and O-ring and reassemble everything. I also stretched the spring a little bit to let it seat a little harder.
The one I worked on wouldn't reliably close below about 20 psi. When I finished it would open and close properly at the lowest pressure I could get through my regulator. I don't know what that was because the gauge didn't register at all, but there was a littlw whisper of air through it. Took about 10 minutes to clean it up completely and now it works great.