Did you install or replace the gasket that goes in first? First the gasket, then o-ring and finally the brass bushing. Part number 304764 should be the part you need. I also believe that the brass bushing has a recess area where the o-ring sits. The smaller motors just use the o-ring and bushing, no gasket.
I buy mine from the BRP dealer, but it can be had online, I think stores like Fastenall as well. Fantastic product, one anyone that works on motors should have in his toolbox.
Sealing gearcases, impeller plates, crank halves, fuel fittings, you name it.