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Ed,
Sounds like you have it installed correctly.
I asked about the o-ring style seal because some people on this site have recommended it. I have never used anything but an original-style seal like yours.
There is a very small leak at the u-joint housing rear-seal on my Suburban. It's just a small drip that I put up with (if they are not dripping a little, they must be out of lubricant").
If you have a 85 or 90 weight transmission oil, that's about right.
Tim
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