Just a quick update... I'm still fighting this issue.

Last night, I replaced the right front leveling sensor, the reservoir pressure sensor, and the rod that hooks from the lower arm to the leveling sensor.

I reset the control unit with the 1.4.0 scanner and the system started working. The air compressor came on right away and the whole car leveled out at the correct height.
As soon as the compressor stopped, the front end of the car started dropping and then the compressor kicked back in. The car raised up again and dropped again. This continued until I shut the X off and then it dropped all the way down.

I pulled codes and now have:
22 (034) Reservoir Pressure Sensor
23 (035) Supply Reservoir Pressure Sensor
17 (023) Supply Reservoir Exhaust Valve
09 (009) Reservoir Valve

I think what is happening is the valve under the passenger door (Part# 37246779713) is leaking/exhausting the air pressure for the front end.

I plan to take the bottom covers off again tonight and check with soapy water. I ran short on time last night.

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2005 4.8is