Well I got in there again.
Removing the seal was much easier this time. It was definately leaking from that seal. It was sealed all the way back there. When you remove the seal you expose a channel on top about 1/8 inch across. I inspected the shaft with my cam and it looked pretty good, didn't cause any damage. Must be hardened. I pushed the new seal in with my tool until it was flush with the case. The second lip barely clears the end of the shaft, but it's there. I ran the bike for 15 minutes plus 1 minute at 4000rpm....drY as a bone.
Th bearing behind the seal definately is sealed or shielded. It's made by nsk. This could be why my seal wasn't working...the oil can't clear fast enough due to the sealed bearing. It still doesn't change that the seal could contact he balls or cage.
So there's a few points here. Flush, 1.5mm, .170", 4.5mm, and to the bearing. So far, to the bearing doesn't seem to be universal advice. 4.5 comes from the dealer and confirmed by measuring Photos. .170 is close to 4.5mm. Flush was recommended on another forum and is obviously he hear minimum.
So now I'm stuck how deep to go now.....
Motorcycles are like chlorine for the gene pool. 8/31/2013