Here is the stock setup with new seal and o-rings installed:
And here it is with the "extra" o-ring in place:
So what do you think? Should I install the o-ring or leave it off? Is this some hot setup that I'm not aware of? I'm guessing that maybe the previous owner was trying to stop the oil leak and was too lazy to change the seals. If that was the case, his plan failed miserably.