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No, Don, it was me that was looking at the diagram wrong. You’re right. There is no top o-ring! Sorry for any confusion that I added to this thread.
This is a confusing topic indeed! For the life of me, I can’t figure out why the engineers thought this system would be a good idea. The ideal system would have been to incorporate both the oring and this recirc system as a “back up”.. This system creates alot of confusion, along with many upper seals being replaced that are not really damaged. It is easy to understand how an oring would be “added” during a rebuild, assuming that the lack of an oring was a manufacturing error. But, adding the oring interferes with the recirc system and can cause excess oil build up on the mag plate.
Ok, well you mention there was some oil on the mag plate, but how much? There will always be a little bit, can’t avoid it. I can’t see what you saw, so it is hard for me to advise. You do want to make sure that the recirc hole/passage is clear though into the intake system, otherwise the system won’t work at all. I would not attempt to remove that seal without the proper OMC seal puller though. I guess if it were mine, I would clean up/relube/service the mag plate reinstall, then use the engine. Pull the flywheel again after putting some hours on it to check for excess oil build up on the mag plate.