When I look under the carpet in the rear of our TE wagon after rain, it is wet under both side windows. I noticed evedence of the same problem in most 3rd gen wagons we looked at. Can anyone advise if it is the windows or is it coming in the tailgate seal, and if so, what is the solution.

oh really? now you're giving me 2nd thoughts on getting a newer wagon...

Hey there Ian.

I've got a KH wagon and had the same problem. It was leaking from the 2 side rear windows. Took it to a windscreen place and they said they sealed it. They did this by just putting new sealant over the old stuff. It still leaked. After 3 visits, they finally took the windows out and stripped all the old sealant off the windows and car and sealed it with a fresh seal.
It has been fine since then. Aparently they said it can be common because Mitsubishi went stingy on the sealer glue in the factory.

Nothing major to stress about but get onto it before it either rots the wood in the back or before rust sets in.

Thank you for confirming my suspicions that it is the side windows that are leaking. The wood has already swollen a little, but is not in need of replacement yet. No rust has started yet, and I'm not going to give it a chance to. I will call a local windscreen company for a quote.