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I did the line loop ORIGINALLY the way you have it listed on the picture there, but the best way is to make sure to do a direct loop between the two lines to each side of the piston. This way, as pressure from the piston moving over increases on one side, it equalizes the other side directly. Then, also loop the lines at the rotary valve (or seal them off... just keep em clean).
When I did the rebuild to make it more like a manual rack, I yanked out all the guts, busted off the piston, and used a good amount of synthetic grease on the rotary valve and the pinion area, as well as ends of the rack where they met with the end of the housing... basically, anywhere that would have been lubricated by the PS fluid or would have any friction.
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