I chose to drive this one in all the way due to the fact that the outside of the seal was only half covered with neoprene. I could still see the steel portion of the seal, in the notch, when it was pressed in flush. I will most likely do the same with the replacement regardless of where the neoprene ends on it.

 

it is not in deep enough...... its a TOUGH lesson to learn.....my 1st engine I set it "flush-ish" like your is.....it leaked like a biatch from day one...... When I finally replaced it we set it DEEP....and it was NOT easy getting it that deep.....but it never leaked again....

When the RMS is set properly it should be set in slightly from the face of the block

 

It looks fine, to me. Very "square" with the crank. I like the depth...just at the "base" of the champher on the block. There's no "raised" seal material in the notch. The "gap" you are concerned with is normal. As Stan said, it's a "dirt" protector and doesn't actually tough the crankshaft. I'd think you are going to have a tough time doing the "next" one any better....

The "latest" iteration of rear seals has the outer portion not covered with seal material for about 1/2 of the seal (you can see exposed steel, as you mentioned.) These are much easier to install than the "older" version, which had seal material completely covering all of the outer "steel", however they must be installed slightly deeper.

The "older" version required a really careful hand, in order to not "fold" over the inner portion (that touches the crankshaft) and thus allow the spring to fall off. Because the outer portion of the seal hit the crankcase at the same instant the inner portion touched the crankshaft, it was very difficult to get both the outside and the inside of the seal started at the same time. Doing this, with the engine in the vehicle, required some really special patience.....and tender words.

The "latest" version is much more forgiving. By leaving part of the outer seal partially bare steel, the inner portion and the outer portion of the seal contact the crankshaft and the crankcase at different depths....making installation way easier.

 

It's not easy to see from the first pic, but the seal isn't flush. I first drove it in with a tool that Rob Edrards loaned me (thanks Rob!). Then I decided to drive it in the remainder of the way with a large punch. This picture shows it a little better. Like Greg said, it may be difficult to get anther one in there any better. I guess I'll cross that bridge when the new seal gets here.

 

If the seal is not flush with the block it will fail after a while. My car had a small like when I bought it in 2003. I replaced the seal when I did the torque converter bearings and the TT in 2005. The reason for the leak was an improper installation by the factory! The seal was not flush with the block and wore on one spot a lot quicker. Installed a new seal and the motor is still bone dry, just like a new car.

 

I ended up getting a new seal and a Sir Tools p234. It ends up that the only issue with my previous attempt was a buildup of grease under the dust lip of the seal. If I’d tried what Dave (davek9) had suggested above, the seal would have probably settled into place and looked fine. I’m pretty sure it would have been fine either way.

The tool came with no instructions. Here's how I used it.

Here are the seals (from left to right original, first try, and current seal).



I had read a few reviews of the p234, on another site, where folks couldn’t get more than two holes in the tool base to line up with bolt holes in the crankshaft. This was not my experience. I was able to solidly bolt the base up without issue.



Here is the installer cup. Note that the seal fits onto it and is held away from the crankshaft during the install.



Here’s the seal ready to install.



Here it is after installation.



Here is another view after it was installed.