Sounds like the washers/gaskets on the valve have gone bad, you'll have to either replace the washer or the entire valve (if you can find a replacement).

Here is what the valve may have looked like when it was new (just to give you an idea of what you're dealing with).

Removal

• Turn off the water to the shower faucet using either a local shutoff valve or the main water valve for the house.

• Turn the shower’s hot and cold water all the way on, to drain leftover water from the pipes.

• Pry the cap out of the center of the diverter’s handle.

• Remove the screw in the middle of the handle, and then pull the handle off the faucet.

• Unscrew the metal sleeve that sits over the valve stem.

• Insert a Shower Valve Socket Wrench over the valve stem and turn the dirervter anti-clockwise to remove it.

• Replace the washer, or the whole diverter if you can find a replacement.

• Apply some Silicone grease (plumbers grease) to the washer before replacing the diverter.

Installation

Installation is the reverse of removal.

• Insert a Shower Valve Socket Wrench over the valve stem and turn the dirervter clockwise to install it.
• Screw on the metal sleeve that sits over the valve stem.
• Push the handle on the faucet, then replace the screw in the middle of the handle.
• Push the cap into of the center of the diverter’s handle.
• Turn the shower’s hot and cold water all the way off.
• Turn on the water to the shower faucet using either a local shutoff valve or the main water valve for the house.

You say you replaced the seats. The seat is where the usually rubber washer on the end of the stem seals against the back of the valve body. If you put your finger in the hole where the stem goes you should be able to feel the surface where sealing takes place. This surface can get scratched and allow leaks. In fact, the leak can make the scratch worse over time. Also, debris can become trapped in this space during repair and prevent sealing. So, make sure the seat is not scratched, it can usually be replaced if it is, and make sure no debris is left behind before closing up. Additionally, there is usually a washer made of paper fiber or hard plastic that sits between the valve body and the stem above the threads. If this washer is worn or missing leaking can occur at that point.

Finally, you say you replaced the seats and it got worse. It is possible the seats are not tight or are installed incorrectly, crooked, or cross threaded preventing the washer from seating. Check for that.

Good luck!