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1. The picture you posted is indeed one of the troublesome lip seals, and yes it has failed.
2. About those model numbers: RD-17S would be a lip seal.
3. EARLY 1955 (RD-17) would have a carbon seal. That was changed to a lip seal in mid-year 1955 (RD-17S).
4. EARLY 1956 models were 30 hp and still had the lip seal. But because they had to replace so many powerheads due to fatal seal failure, another change was made in mid-year 1956, reverting back to the old reliable carbon seal.
5. I am not sure of the model numbers denoting the change in 1956. I may have lost them when my computer crashed.
6. Hope this helps clear things up.