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I'm using everything new. Messed with it a hour more and just got sick of it.The outer lip should be oriented in the lowest position, how it sounds like you have it. Is the fuel pump correctly indexed into the fuel tank opening? It should go only one way, with the notch and the tab together (see second pic, the green rectangle; that should be where the tab on the pump aligns with the tank mount). Be sure to temporarily bend aside the white locking latch that keeps the ring from rotating. In the pic below (not your pump and tank, but similar) the hose connections should be pointing toward the front of the tank. Got a pic of where yours is?
And are you using a new gasket, or reusing the old? I think we had to use some serious torque to get a new gasket to seat. We used two channel lock pliers on opposing sides of the ring, carefully squeezing between a hook on the outer ring and the hooks that stick up from the tank (see second pic for one side of our plier placement). That way the pressure was even and we didn't use a hammer at all. Maybe lightly lube the top of the pump where the lock ring sits on it?
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It's a 1/2"Looks great! Seems to have worked like a charm. Is that a 3/8" or 1/2" drive hole?