After washing the car I checked the tailgate for any water intrusion and on removing the lights access panels saw there was.
Having already sealed the painted plastic bar fittings I looked closely at the light units and saw water had entered via the upper section of the seal, run down the lamp units and instead of being captured by the built in metal scoop and deflected into the bottom of the tailgate, had dripped into the plastic liner.
I'm now sure this is how water enters the boot interior, wets the carpet and linings and causes rust, as the plastic liner is mounted inside the tailgate seal, so the only way water can then exit is into the boot.
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I am keen to keep water out of the car and tailgate, so investigated.
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I could see the rubber seal a the top of the lamp unit was only just being trapped by the metalwork, the majority of the seal was not compressed. Over 34 years this has compressed the seal edge and now allows water to pass through.
To remove the lamp unit one has to unscrew the painted plastic bar then the lamp units unbolt.
The seal is clearly compressed along the upper edge, with evidence of water intrusion.
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I tried reinstalling the lamp units higher, but the alignment tabs on the top side stop it being mounted high enough for the seal to be fully covered by the metalwork.
As a result of the seal being only compressed along it's top edge it has distorted downwards, so I cut some thin plastic strips and installed them inside the seal to push it upwards a little.
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Even with the seal being restrained upwards it was still only contacting the metalwork along it's upper edge, so I resorted to adding some non-setting butyl mastic along the top edge only, before installing the lamp units.
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When fitting the lamp units place them in as high as possible and tighten fastenings loosely, then pull the unit down just enough to be able to fit the painted plastic bar, lastly push the lamp units upwards against the plastic bar and tighten the retaining nuts fully.
After testing using a squirty bottle and water I am now confident no more water will enter the tailgate through these lamp units.
Having noticed rust inside another XM tailgate recently I then checked my sable car and found the same issue was happening, but no rust as yet.
Sable car tailgate lamp upper rubber seal not covered by metalwork and allowing water to pass into the tailgate.
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It appears the stamping of the metal has allowed too much tolerance at the upper edge, so the seals are not being compressed sufficiently to stop water ingress. This is a design stage issue, not a manufacturing one: it's difficult to resolve properly without adding more metal to the tailgate skin, so it covers the rubber seal fully.
It appears as though the metal aperture in the tailgate skin was set in relation to the solid plastic of the top of the lamp unit, not the rubber seal.
The tailgate is built with an internal scoop to deflect any water that leaks in, down into the base of the tailgate, where it exits via the drain holes, but fails to catch water that runs inwards down the lamp unit.
My observations are that most XM tailgate liners show rust staining, especially round the latch mechanism and have evidence of water. I am now confident this water intrusion is from the lamp unit seals.