Welcome to the forum. We'll have to get together for a ride. A few of us here do Run 21 down by you every year in addition to other runs.
Check out the How To section and look up "Bandit" chutch and maybe one of the "Open Primary" posts and you will see that seal you are referring to. Not a common issue on here but could be a sign that your clutch hub is loose and walking on the shaft and wearing out that seal. Many threads here on this subject.
Let us know what you find.
