I went over to my storage space last night to take another look at the transmission. I think the 'tailshaft hitting the seal' thing is b/c of the camera angle. I'll try to snap a couple of pics tonight.
I emailed the seller last night (he is a Texas Ebay guy - Jalopy45 do you know anything about him?). This was his response:
Hello. I will speak to my builder tomorrow afternoon and get back to you on the tailshaft against the seal. However I wanted to go ahead and get back with you on the remaining issues. Per my instruction, my builder paints the units before putting in the seal, so if it was overlooked then it should have overspray on it. I don't know what to say about the knick.., I can't 100% rule out that it got knicked while awaiting or during the packaging however I will investigate. We have boxes of seals, so I'd be happy to drop another in the mail to you.
Regarding the silicone, I can comment on that because I've watched him build hundreds of these for me. There are no gaskets between the main case and the tailhousing, only silicone. What you are seeing is where the silicone has bulged out when the two housings were bolted back together. Instead of scraping it off, my builder runs his finger flat against the housings to make the silicone flush (instead of bulged out) and to give it an even better seal against leaking. It's not always as pretty but I can honestly say that we've never had a report of a unit leaking.
I thought about putting in a complaint with E-Bay, but the 60 day time period to do so is up
If the seal just needs to be replaced, I won't throw much of a fit.