The correct answer is C) Leaking air valves. Leaking air valves in a reciprocating air compressor can cause a reduction in the compressor's capacity. Air valves are critical components that control the flow of air into and out of the compressor cylinders. If these valves are not sealing properly, it can lead to air leaks, resulting in reduced compression efficiency and overall capacity. The other options are not the most probable cause of reduced capacity. A) Carbon on cylinder heads may restrict airflow but is less likely to be the primary cause. B) A plugged air cooler would affect the cooling of the compressed air, but not necessarily the compressor's capacity. D) A faulty unloader may affect the compressor's ability to start and stop, but would not directly impact its capacity during operation.