The air getting in without a loss of fluid would lead me anywhere a cap is. Pump or reservoir. Anywhere else in hydraulic systems would show a hydraulic leak. Maybe the cap on the pump is bad letting excess air in after bleeding. However the presence of air would raise the fluid level so maybe you are losing it just haven't noticed yet.

So does the reservoir actually fill up as air is induced into the system?

Have you had someone sit in the back with the hatch up a little to watch the fluid level? I noticed the reservoir is filer right to the line. This could be a dumb suggestion but why not fill the reservoir a little over half. Maybe a diameter is a tad bigger somewhere and the lines or rams consume just a little more thereby running the reservoir dry or at least low enough to get air in there?

For 1/2 quart of steering fluid its worth a try....

Yes, the fill plug has vent slots.

No. It stays the same.

I've been advised by several people to avoid the temptation of overfilling the reservoir. I have tried it just slightly overfilled and still had this problem. I also had the problem before installing the Latham reservoir.

Ahh, time to call Latham.

If the level isn't raising, I can't see how you are not losing fluid as it accumulates air. I'm guessing you have a bad seal on the drive ram, be sure to keep us updated on the outcome, good luck!

It sounds to me like you have 2 problems, the first is a flow imbalance, the second is a leak at the rear of the starboard cylinder. What's happening is when you turn left, the volume required at either cylinder is different. The port cylinder is pulling the drive to the left faster than the starboard cylinder is pushing, thus creating a vacuum at the rear of the starboard cylinder. If the piston seals were bad, it would just pull fluid from the front side of the piston. If it were me I would check the hoses to make sure there aren't any blockages, especially at the rod end of the starboard cylinder. I would also test the system out of the water and run the drive to the hard left and right while the engine is running and have someone check for leaks.