Resealing lower unit Johnson 25hp two stroke questions

1981 Johnson 25hp model J25RCIM

This question is about the brass bushing I removed from the lower unit: its rubber O-ring is too small to cover the opening it came out of, so I'm thinking it fits inside the bushing instead of goes "under" the bushing as it appears to be in some other models. Here's a photo of it in the opening the bushing came out of.

I've seen it done different ways in vids on this topic, but would appreciate a confirmation that the o-ring fits inside the bushing in this case, and then the bushing is installed. Looks that way to me.

Also I noticed that in removing the bushing I created a small chip in the bottom of the opening where the bushing fits (see bottom photo) -- not sure if that's going to create a water leak or not, since the brass fitting wouldn't necessarily make a watertight seal there anyway. Any guidance on the chip? Problem?

Thanks for any help you can provide --

Put the o-ring in the recess of the bushing.----Drive the bushing in.----Done

Thanks racerone -- regarding the driveshaft seals, when they go back into the driveshaft housing do they go in with the openings facing each other, as in this photo? Or open side into the housing for both? Got them out and then wasn't sure which way they were oriented to each other.

I also got two rubber o-ring seals, one thick and one thin, see photo -- One goes on the thing behind the prop, which houses the two prop shaft seals, but which one? The one that came off was the thinner one, is it a choice, or is there another purpose for the thicker o-ring?

The smaller washer in the photo was included in the kit but I didn't find one like it when disassembling the unit -- the schematic shows a gasket under the brass fitting that houses the shift linkage o-ring, but I don't think there was one when I took it out...

Thanks ---

Harold

Take the time to find parts list for a newer 28 hp model with the same lower unit.----Shows how the seals go !

Thanks for the tip racerone, found a year where they have a little call-out showing how they're oriented.