It is very kind of him to take the time to put this down and send it to me for inclusion on this site. Here are Ed's instructions.
Step-by-Step Instructions to Repair Air Compressor with a faulty regulator that does not allow adequate air pressure to come out of air hose.
When (the compressor) tank has plenty of air but you only get a short burst of air pressure (only momentarily) out of air hose and compressor's air hose gauge goes to zero.
1. Tools Required - Phillips screw driver, a very big straight bladed screw driver, crescent wrench, Dremel, some type of o-ring grease such as Teflon lube, or silicon grease.
2. Be sure tank is not empty and has some pressure in tank. Turn Regulator Control Knob counter-clockwise all the way and release all pressure from air hose connector. The air pressure in the tank forces the Control Knob's plastic piston to move back into the Control Knob/Regulator's housing thus preventing damage to the plastic piston when disassembling.
3. Make sure compressor is unplugged.
4. Now release all air pressure from tank using the water drain valve on bottom of tank.
5. Remove (6) screws holding top half of plastic compressor cover on: (2) from handle and (1) at each corner of plastic housing cover. The (2) screws in the handle are Machine Screws 10-32 x 1" Phillips and most likely will strip when reassembled - replace with 10-32 x 1 1/4" Phillips.
6. Lay top half of plastic cover over to side - no need to disconnect any wires.
7. Remove Regulator by using Crescent Wrench and turning hex nut counter-clockwise. Will be tight but be gentle so as not to damage o-ring seal. There will be just enough room to get wrench on at an angle with bottom plastic housing still in place when the Control Knob is completely screwed out.
8. Regulator Control Knob removed.
9. Turn the red Control Knob clockwise and the plastic piston with post in the middle (in above picture 5) will be pushed out.
10. Remove plastic piston, compression spring, and metal disk from Control Knob housing and clean all parts with a paper towel or rag; don't use anything in housing that will scratch inner wall of cylinder, but clean out any corrosion. Do not remove the (2) o-rings from the plastic piston unless you plan to replace them.
11. Turn red Control Knob counter-clockwise again to screw knob out for reassembling.
12. Apply a thin film of lubricant (would not recommend grease as it will gum up with time) - Teflon or Silicon lubricant or o-ring grease to the cylinder walls of the control knob's housing, to the metal disk, and to the o-rings.
13. Reassemble the above parts. Be sure the metal disk's cupped side is facing to the bottom / inside of the Control Knob. It is easier to get these parts reassembled if you hold the parts as pictured below (on the crescent wrench) in your hand and place the Control Knob on top of them pressing them into the Control Knob housing carefully, not to damage the o-rings. Press in until completely seated like in picture 5. Sit reassembled Control Knob aside until final assembly.
14. With a large flat screwdriver unscrew brass tank pressure seal assembly. Do not remove o-ring unless you plan on replacing it.
15. Clean inside of manifold with a paper towel or rag.
16. The part causing the problem is the rubber Tank Pressure Seat. Carefully remove the spring with it's rubber seat, clean both parts. What has happened, due to the type of material, from pressure and moisture the rubber has swelled to the extent that an adequate amount of air cannot pass around the sides of the rubber seat. No need to remove the rubber seat from the compression spring.
17. Using a Dremel with a 1/8" round carbide bit carefully grind a notch into the (4) sides (the center of the sides only, not the corners) of the rubber seat. BE VERY CAREFUL NOT TO GRIND TO DEEP. Upon close inspection of the sealing surface of the rubber seat you'll notice a circular groove that makes contact with the sealing / mating surface inside of the brass threaded hex bushing, be sure to not grind any where close to this sealing groove in the rubber or your tank will no longer hold pressure when stored. Do Not Grind on the corners at all; the corners keep the rubber seat in place and aligned in the brass hex bushing.
18. Notice depth of the notches is just enough to create a gap for air to come around the rubber when it is reassembled in the brass threaded hex bushing.
19. Apply a very thin film of Teflon or Silicon lube or o-ring grease to the rubber and reassembly into brass threaded hex bushing.
20. Apply a light coating of lubricant to the o-ring and screw brass assembly into manifold. Just tighten snugly - no need to overly tighten o-ring seals -, just good and snug (to tight will cut o-ring).
21. Apply a coating of lubricant to the Regulator Control Knob assembly's o-ring and also to it's mating surface of the manifold. This o-ring will be fairly easy to cut if not careful. Reassemble Regulator Control Knob assembly into manifold, again tighten snugly, but don't over do.
22. Reassemble top half of plastic cover to compressor.
This fix will now allow an adequate amount of air to pass around the rubber seat that had swelled over time.
If someone can locate a part number and a source for a new rubber seat please post it on the parts needed page, and refer to this page too, if you would.