If you were in the US I would be adament in saying that you should NOT change to R134. The reason is that 134 prices are rapidly increasing while R12 is coming down in price due to the decreasing demand since the cars requiring it are hitting the junk yards in record numbers. I would expect that a similar pricing variance would be occurring down under.

I just bought a 30 pound container of R12 delivered to my door for $425 while 134 is rapidly going up with todays price being around $325. Since the R12 price is only about 30% more, then there is only about a $7 difference for the 2.5 pounds needed for one of these cars. You probably can't even buy the adapter valves for that. Then after you're done you will have a system with at least a 15% loss of cooling capacity. Add to that the fact that statistically converted systems have a much higher failure rate and it just doesn't make sense. A further additional issue is that most MB's do not have much, if any, reserve condensor capacity to make for an effective conversion, depending on your climate.

Yes, the compressor seal is a likely leak, but the seal can be replaced without replacing the compressor.

In my experience for a leak at the rate you describe, UV dye will most likely find it. A red dye with the naked eye will not. Use a yellow/liime UV dye and then search for it with a UV lamp and yellow glasses.

I'm not sure I agree with replacing all the o-rings to try to get lucky and fix the leak. O-rings rarely just go bad on their own. Additionally opening every connection on the system introduces lots of chances to INTRODUCE an additional leak in the system.

Since you now have the system charged, what I would do is add UV dye to the system while it is charged and still working. Then I would immediately run the a/c enough to get a good puddle of condensation water underneath the car in a dark area or at night and then check the puddle with a UV lamp and yellow glasses to see if there is any dye present. If so then you have an evaporator leak or possibly an expansion valve leak.

Another somewhat common source of a leak is at the connection between the bulb and the block of the expansion valve.

Hope all this helps and good luck,