7:26 p.m. on August 19, 2006 (EDT)
Hoosier -
The fuel cap on the 123 is a pressure relief valve. A slight correction to Tom's statement - the 123 is not a pump pressurized stove, as he was saying. But, the heat conducted down the stem (which acts as the generator tube as well as feeding fuel to the jet) provides some heat to increase the vapor pressure of the fuel in the fuel tank. So the 123 (and Primus 71 and several older Primus white gas and kerosene stoves and a number of older Optimus stoves) are more correctly described as "heat pressurized". This is pretty dependable, once you get the stove lit. But a couple things can go wrong. When the stove gets old, the gasket on the fuel cap gets hard and will not provide a good seal. Usually, all that means is that the stove will not pressurize until you replace the fuel cap gasket (happened to me on a climbing trip in the Bugaboos in the 1960s - luckily my partner had another stove along). The cap itself, as I noted, is a pressure relief valve, in case the fuel tank gets overheated. When you get significant overheating, hence overpressurization, the valve in the cap (spring-loaded) releases the pressure. It is fairly common for the vapor to ignite, making a spectacular jet of flame. I have seen this several times, thankfully not with my stoves, and thankfully no injuries or property loss. But if the valve ever releases, generally it must be replaced, because it tends to not seat properly when the pressure is relieved. Replacing the cap with a new one is the answer here. As Tom asked, where is the leak? If it is coming from the hole in the fuel cap (which is the pressure relief hole), the valve must be replaced. A&H can do this or send you a new cap. (a few dollars plus shipping). If it is leaking around the cap itself, a new gasket is all that is needed, again pretty cheap from A&H, although I think you can find a gasket at your neighborhood OSH/Lowes/Home Depot/ maybe even Ace.
One other thing that can happen is that Optimus made a cap/pump set that was intended to pre-pressurize the stove and avoid the "hold it in your hands to heat the fuel" procedure (frostbite generator in winter!). If you use the tiny pump, it only takes 1 or 2 strokes, just enough to send a few drops of fuel up the stem to dribble into the priming cup (the depression around the stem in the top of the tank. Don't fill the cup more than half full! And don't overpump if you are using the Optimus pump. I did that once and as the heat built the pressure, fuel came streaming out through the pressure relief valve, making a rapidly spreading pool of flame - really scary! Luckily we had a fire extinguisher handy. You can tell if you have the Optimus cap that adapts to the little pump - the regular pressure relief cap is almost flat, while the Optimus pump-type has a little pipe that sticks up maybe 5 mm, making a small nipple onto which to attach the pump. The previous owner may have at one time overpumped and gotten the pressure relief valve to release and not reseat properly. If so, replace the cap and pressure relief valve.
One other possibility - how full are you filling the fuel tank? If you note, the fuel tank has a rim on the side about 2/3 of the way from the bottom. This is the maximum fill line. If you overfill the tank, priming or in use may overpressurize the fuel tank and start forcing fuel out through the pressure relief valve.
Tom already mentioned looking at the base of the stem to see if there is a leak where the stem and tank join. Someone may have removed the stem, then cross-threaded it when reassembling it.
I mentioned previously inspecting the valve to see if it is properly threaded in and the packing is still intact.
Tom - HOW MUCH?????!!!!! Wow!!! Well, the last time I saw a new 123 (10 years ago?), it was being sold at retail for about $75, for the stove itself. The last time I saw the Sigg cooker set to go with the 123 (and Primus 71L and a similar Optimus, this not long after Optimus, Primus, and Svea had merged, a few years before Primus got spun off again), the cookset was about $50. Well, so maybe the price isn't too bad. But still .....