[Walt Fricke]

Well, you'd always want to lubricate the inside lips, as they are the wear parts so they need lubrication (of course, they are going to get it pretty soon anyway).

As long as you can get it in, I think not lubricating the outside (i.e., install dry) has lots to commend it. Me, when I have the engine apart, I install the seal into the #8 before putting the crank into the case, because it is easier to do this on the bench. Or I just leave the old seal in, if it was working well. The rubber ribs of the seal ought to do the job while holding onto the bearing.

But others like some lube of one sort or another for this.

If the leak is between the seal and the crank snout, then either the seal is bad, or the crank is not smooth.

One trick you can try is to remove the seal (or take a new seal) and shorten the garter spring which hold the seal lips to the crank. Don't have to take off much to add a bit more tension. I forget just how you do this, but it was obvious and not at all difficult.