Don't worry about the rubber seal at all! We use them in general just the way yours is installed, and they work fine. Just as Frosty said, make shure there is no radial bearing at the inner end of the shaft tube; the rubber seal has its own, which takes radial loads away from the sealing lips.
Remember to let any air out of the unit when she goes back into the water (squeeze the sealing end so it opens slightly until pure water comes out on top of shaft, then add some grease through the opening (use Volvo special, the blue stuff supplied with the sealing).
What you should worry about, however, is the shaft centering in the tube! While dry, loosen the shaft seal and slide it forward on the shaft. Adjust engine pads until shaft is centered and reconnect. Note that the Bullflex can take some angular displacement. Concur with Frosty regarding your propeller "environment". The prop is too close to the rudder, and the deadwood is far too wide and square, giving a wide wake that causes torque variations in the shaft. Also check that all four rubber pads are intact; if one has lost vulcanizing contact with its carrier, the engine will twist when thrust is applied.
The MS gear is a mechanical unit with cone couplings; it is a bit rough in manoeuvering, but check that it has the correct oil and quantity, since they can be a bit sensitive.