Check out this link:
Kohler Plumbing
This should be your faucet. This particular faucet has a
CERAMIC VALVE (PART # 1017426 at the link... which I think you already removed). I think your best bet will be to call kohler and have them send you a new ceramic valve. It may also be a good idea to have them send you part # 1060800 (washer cups/seal kit).
Did you try cleaning the washer cups/seals UNDER the ceramic valve???
Most likely something got into the ceramic cartridge and there is nothing you can do about this... except get it replaced! Tell Kohler you followed the instructions to the letter and still have this issue. If they don't cooperate then just tell them you are taking it out and RETURNING IT from where you got it.
They won't like that... ;)
Let me know what you do...
MARK