Page 22-7, Wheels-Bearings-Tires, of the 1973 Dodge and Plymouth (I have both) Factory Service Manual, tends to agree with everyone else has said with a very vague diagram. To clarify, the first, second, and fourth pictures, the area where your thumb is, that's what everyone is saying should hang out of the disc brake rotor and touch the spindle (or the little white foam gasket on the spindle, if you have that). But if you actually read page 22-8, and ignore the vague diagram, it says the seal goes INWARD, and that seems to be backed by TheRamManInc's youtube channel, "Rotor Grease Seal Installation":
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This is how I installed them because I didn't even think to double check the shop manual. And doing it this way required me to hammer the outer race of the inner wheel bearing (hope that makes sense) all the way down until it hit a machined lip within the rotor. After all was said and done, everything fit beautifully, there's no rubber gasket rubbing against the spindle at all times, etc., and this seems to be further backed up by another one of his videos "Mopar Disc Spindle Assembly - By TheRamManInc.com":
I mean look how beautiful it sits on the spindle! He seems to be an old-school mechanic and knows his stuff, but at the same time, it looks like he has the outer wheel bearing on backwards, but I think he just messed up when he propped it all together for the video.
But now I'm starting to doubt everything in the world because of the vague picture in the shop manual...
I guess one way to help answer all of this is, do you only hammer the outer race of the inner wheel bearing flush with the rotor hub, or do you bring it down as far as it can go until it hits the lip within the rotor? If you only hammer it until it is flush with the rotor hub, I can see why people think the rubber seal goes outward, because it fits nicely in the hub assembly as well.
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