You probably won't be able to tell if the seal is damaged unless it's really obvious, like torn or deformed. Taking it out will pretty much destroy it.
I always put sealer on the outside of the seal -- it doesn't make it harder to put in. It does, however, take care of nicks or dings in the housing bore, which happen all the time when the seal is removed carelessly.
I'm glad you marked the pinion. It's SO easy to overtighten the nut. I usually go just a tad past where the marks line up -- something like 1/16". The pinion should *just* get a little harder to turn when you're there.
You probably know that you can't loosen the nut once it's too tight -- you have to replace the crush sleeve.
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Lee Peterson
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"I didn't expect a kind of Spanish Inquisition...!"
'69 Cameo White RA III Judge, 4 speed, owned since 1977 -- my first car.
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