Thanks, Jemal. Didn't dawn on me that the pot joint would wear at that spot, but just looked and it appears to be in fine shape. I'm going to set it back a bit from flush, closer to having the center bevel flush. I also heard from Chuck at Minimania and his advice is the same as yours, and he cautioned me on the likelihood that the brass bushing in the cover is often the cause of the seal failure.

I'm going roll the dice this time around and just changing the seal. The bushing doesn't appear appreciatively worn, and given how few miles this car goes, I should be good for a while regardless. Being an editor, I wanted to suggest that you mention the correlation between the bushing and seal wear on the landing page for the seal as well as the bushing. Currently, it's only mentioned on the bushing page. 

Thanks so much for the help. 

Doug

Often, you want to look at any wear from the seal lip if re-using the pot joints.... you can position the seal to avoid a deep groove!

But in general, they are fit closer to flush with the outside.  I try to get them in just far enough to have full contact with the side of the seal.  

I'm putting in a new seal (ADU 5738) to differential side cover and wondering if the outer edge of the seal should be flush with the cover or if it should be recessed so that that protruding inner lip will be flush with the cover. Didn't happen to notice when I took the old on out. Any advice would be greatly appreciated. This is pot joint, not hardy spicer car.

Doug