You all are right. I've compared pictures of my WTC with Ramesh one, and mine is a little bit "crowdy" inside, because length is more or less the same, but I'm using a 650 CC tank (bigger tank and longer rod). The reason for this was the problems he had with achieveing a correct waterline. I though that with a bigger tank the problem will be solved, but the problem of pressure arose. My cylinder is 55 cm long, 10 cm OD and 9,6 cm ID, which means a net internal volume of 3.979 CC, but volume of all the fittigns is to be substracted to get remaining space to hold extra pressure, so the result is: Too many people inside for that tank (something similar to Marx brothers cabin).
Now there are no leak through the shaft with spring facing inwards, and I've applied sealing sylicon to nuts in the rear end cap. Fore cap is fitted with rubber tube inside and o rings outside to watertight threads on the rods. It's all working, but still leaking through rubber joint. You can see all these in attached pictures. Solution, as you have suggested, increase cylinder volume. There's room enough to fix a piece of tube forward which can give some 240 CC extra void space. Let's fit and check again.
Stay tuned for more rock n' roll.