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I think the fact that it extends down farther is alright & will prevent anything from making it's way up. I can see from the second picture there isn't a lip under the headlight bucket. I think it would be OK to cut a groove in the upper lip, with the bottom of the cut level with the metal of the headlight bucket. I'd also paint the hole edges with something like POR-15 & maybe put a little little silicone sealer under the lip.
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Marv Evans
'69 911E
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