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Yep, the "paint" on the outside of most seals will heat up from the friction of being driven into the bore and it helps to seal everything together. Did you put some red Loctite on the pinion nut? I would recommend that. I wish I had my 1009 to measure for you. That seal gap looks good to...

I have poor-boy'd one before by marking the end of the pinion and the nut with paint before removal and also counting the exposed threads. It worked for several years and was still working when I sold it. The flange of any seal should be flat against the end of the housing after being driven...