Have you tried tightening the cap? I've seen what you've described with a RainBird valve on a dripline. The cap appeared to be tight but I turned it a bit farther and it stopped spraying water.
Try turning the flow control down as far as you can and have the drippers still working.
You may have to swap out the valve again to get it to shut off all the way. Don't use the same model valve whatever you do. Maybe spend the money, get a brass valve body and install a valve adapter. The Irritrol 2623DPR is a good choice.
Click Here