Maybe I'm reading your reply incorrectly, but the round rubber seal
with the lip is in the rolled over edge of the molding (trim)
ring and seals the gap between the molding and the retainer
ring, it does not contact the headlamp at all:
http://m7.i.pbase.com/g9/87/900387/2/154471417.H4Hk3he0.jpgDG