It's there strictly for water management (by design, it can't contribute to sealing off exhaust gases from the cabin because covers only the top and sides of the hatch opening, while remaining completely open to the outside at the bottom). If your Z is a later-model 240 (where there are no vents on the lower hatch surface), the most likely culprit will be your main weatherstripping ("the large weatherstrip that's been installed years ago"). It may have lost some of its original shape after years of living 99% of its life in a crushed state while the hatch is closed. IIRC, some owners also found that the gasket around their taillights housings had deteriorated, allowing exhaust gases to enter the cabin through the rear panel. If your Z is an earlier-model 240 (vents on the lower hatch surface), that's a whole different (and more challenging) ballgame. There are several threads on the CZCC site that discuss problems (several) and remedies for this design.