I just want to make sure that I do it correctly this time, because I'm so fed up with these oil leaks. Basically I'm confused about the Spacer, because I can't figure out the logic behind its design. According to the Parts Diagram, I should have the following components. Listed in order of installation :

#27 - BEARING, DRIVE SHAFT (internal?)
#44 - O RING
#43 - WASHER
#42 - NUT

1. Does the Seal get inserted all the way in, so that it's flush against the Bearing? I pushed it in about 3mm.

2. The Parts Diagram shows an O-ring. I see an O-ring inside my spacer (red) is this the O-ring in question or should there be another one?

1. According to the manual, the notched end (green) sits flush against the Bearing, but this would allow oil to seep in through the notches. (by design?)

2. Various resources state that the notches are for the O-ring to seat properly, but there is no notched O-ring that fits in those grooves. Is there?

3. The area marked in (blue) suggests that the first 1/2 inch of the Spacer actually fits over something, but the Bearing it gets pushed against is completely flat.

Clearly I do not understand what's going on behind the Countershaft Seal, because in my eyes the Spacer should be designed differently. Any clarity you can provide on this is appreciated.