When servicing Mavic freehub bodies (old bushing style) there are a few things that you should remember.
1. The little adjuster knob on the non-drive side of the hub is not meant to hold the hub together. The axle and the fixing bolt for the freehub body should bottom out on each other and be tight. Once this has been accomplished you can adjust out the play with the adjuster nut/knob.
2. When disassembling said freehub body, there is a good chance that at least one pawl will fall out accompanied by the washer. Oh, yes there is a washer. It goes between the external shell and the hub body, it’s kind of important. Pay attention to what came out and where it went.
3. The rubber seal is the only thing that keeps dirt out. Don’t cut the thing in half. It is not causing the drag you are complaining about. Keep the seal.
4. The drag and possible loud squeal at high speeds you’re talking about is caused by the lack of lube on the bushing. This is why you pulled the thing apart to begin with. This lube is important. Do not use grease. Especially the green Park kind. It’s too heavy for this application and will not solve the problem. Use the Mavic lube or the newer Dumonde Tech Freehub Body lube. Both are designed for this application and work great.
5. After you have cleaned all the insides, inspect the parts. If there was a lot of play to begin with you may have worn bushing. It should be yellow. Is it black? How about them pawls? Are some of the corners missing? Replace broken, lost or worn parts, there aint no reason to be puttin’ broken shit back together.
6. At this point you need to remember that the whole problem was caused by a lack of maintenance and that you should service the freehub body again in about 700-1000 miles. Or sooner if the damn things starts making noise or had lots of wear on the fixed side of the bushing (the part that can’t be replaced).