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If the knob is fully closed and it is still leaking it's more likely that you have a valve or scale problem. Either the seals in the shutoff valve are worn, or there is scale buildup in the valve which is preventing it from sealing properly. First thing I would try is running descaler through your machine several times and seeing if that improves the valve seal. Obviously if you are having a problem with the steam wand, make sure to run the descaler through the wand and not just the spoon ! If you've never descaled your machine and have had it for a while, you might want to run descaler through 6 or more times, letting the descaler liquid sit in the system between flushes to really get at the scale. If it does not improve with descaling, then you should bring your machine to an appliance/coffee machine repair shop for them to look at the valve.
The steam wand began to seriously leak but a call to Starbucks Customer Service line and I was talked through how to adjust it so that the leaking stopped. It requires taking off the top/back panel of the machine (6 philips screws) then using a small allen key (1.5 mm I believe) to loosen and adjust a plastic oblong donut-shaped thing (a "cam" actually) on the shaft of the steam knob... no more drips. The key to prevent dripping is to open the steam knob without putting pressure on it when it gets to the full-open stop position. Cranking it too hard when it comes to a stop in the full-open position will slowly move the cam out of position. Then the shaft doesn't fully seat inside the machine anymore and won't fully shut off the water to the steam wand. Then, no matter how hard you crank the knob in the shut-off position it will still drip. The purpose of the cam is to stop the knob from complete unscrewing and it also turns the pump on and off for the steam wand. The cam adjustment is very small but completely solves the dripping problem. Seeing inside the machine made me realize how easy it would be to repair problems as long as I can get the parts from Starbucks or perhaps Saeco.
Your steam manifold needs to be replaced. I still have the original in mine but if you don't cool them down after steaming they will develop hair line cracks and leak after while. To cool it down after steaming push the steam button again, then open the knob and run it till you have a steady stream of water, then close the knob.
The replacement manifolds are black and have held up very well but they have a brass manifold re[placement but you will need new mounting hardware.