This article is from the Chrysler-Plymouth-Dodge FAQ, by Dr. David Zatz with numerous contributions by others.
From: (e-mail address removed).com (25312-lazaro)
Water enters the trunk by running down the side of the hatch opening and
when it reaches the tail lights, it flows into them. From there, it pours
into the trunk through the holes that the tail light bulbs fit through.
From inside the trunk, remove the tail light bulb cover panel. Now
unfasten a few of the tail light bulbs and let them hang into the trunk.
With a long 1/4 inch drill bit (or similar size), drill a few holes in the
bottom of the tail light lens by sticking the bit through the holes the the
bulbs occupied. This allows the water that enters the tail lights to drain
out these holes and onto the ground instead of accumulating in the tail
lights and pouring into the trunk through the bulb holes. I drilled about
3 or four 1/4 inch holes per each bulb location. Did the trick. The trunk
has been bone dry ever since.I replaced the water-damaged carpet backing
with 1/2 inch household carpet backing that I got at a home improvement
store and cut to size. It improves the sound deadening, too. The
cardboard floor (spare tire cover) was water damaged too, so I got a new
one for ~$25 at the dealer. Make sure you air dry the trunk real well. I
had so much water that I had to pull the drain plug at the bottom of the
spare tire well to let it out.
I know of Ford Probes suffering this same problem (with similar
solution) due to the same hatchback & tail light configuration.