1987 9.9 HP Water Tube Grommet Position

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I am replacing the water tube grommet on my 1987 Evinrude 9.9 and am unsure of its exact position at the top of the water tube. The old grommet was disintegrated but seemed to be level with the top of the water tube. I have included a few pictures. I am also interested in knowing if, after the grommet is properly positioned, if the if the top of the water tube assembly should be level with the top of the exhaust tube. Any assistance is appreciated.