The little brass finger should be pressing in on the needle valve when the pump is stopped. It looks like it has been backed off so far that it will never blow down the pump as it sits right now. What you need to do is blow down the pump by pressing in the brass pin, then loosen the Swagelock fitting and thin lock nut, and screw in the unloader valve until you see the brass finger push the brass pin back into the unloader valve body by about 1/4". Let the compressor start. The valve should be bleeding continuously. Unscrew the valve assembly back out of the case while the compressor is running, until the hissing stops through the threaded port below the valve. Once it stops, lock the thin brass locknut again, don't keep moving the valve out. Re-tighten the Swagelock. This should solve the leaking. At cut out, the brass finger should move to the right and push the pin in far enough to blow down the pump.
If it doesn't stop the hissing, there are several things to look for:
1) The brass pin in the picture can be pulled out of the valve by removing the Swagelock fitting. It is a simple brass pin which is threaded on one end. The thread has a small brass nut which retains a rubber seal inside a small cup. Many times this rubber seal will dry out and crack. This is the only thing which seals the blowdown when the brass lever pulls away from the brass pin. It is pushed against a seat by a spring (confused yet?). It's really very simple when you take it apart and look at it. You can either make a new rubber seal with a hole punch and pin punch and put it in the cup, or you can use an o-ring of the proper size. Once you replace the seal, you may need to go through the adjustment procedure again. Do not over torque the small brass nut on the pin, it is very easy to strip the threads.
2) If the hissing is continuous after shutdown, there is something wrong with the check valve. This type of check valve can be disassembled by pulling the contents out through the hex-head cap on the side of the valve body (de-pressurize the tank and system entirely before pulling this cap!!!). There should be a brass piston, a spring and a seat, probably teflon. The seat will often split and fall apart, either holding the check valve open, or creating a leak path in the space left by the missing pieces. There used to be rebuild kits available for these check valves. Contact a DV Systems retailer to find out for sure. Any good compressor shop should be able to source them if they are still available. The spring in the check valve may also have broken, producing the same results.
If it is not the check valve itself, you may have lost some valve springs, which have now migrated to the check valve and are now holding it open. Time for a spring kit! Your valve seats may have also taken a beating, so you'll only know for sure by pulling the valves. Did the intercooler safety valve blow by any chance?
3) The unloader valve has lost some of its travel and is not actuating the blowdown valve correctly. There is an aluminum piece inside the cone-shaped cover that rides on the face of a steel plate on the end of the crankshaft. The two pads that contact the steel plate can wear over time, and not allow the brass lever to fully travel and move the brass pin. It's an easy, pull out the old and replace with the new type of job, not hard at all. This problem usually results in the compressor failing to unload, however, so it is likely not your problem.
If you go messing about inside the unloader cover, be warned that pulling the bolt in the end of the crankshaft will allow the steel plate to come off and you'll be cussing trying to pick up all the ball bearings that will fall out.
