That's the way it is on my 73 1800 (rubber o-ring type). It has the pump on which the inlet and outlet are on opposite ends of the pump. I think some of them have inlet/outlet on the same end but I've never seen one in real life.

You might try opening it up and cleaning up the groove, etc. Careful, there are about 5 or 6 little roller kind of vanes inside that are loose. If possible, maybe you can roll the seal a bit when you press it back into the groove, hoping to encourage a better seal. Make sure it's good and snug when you screw t back together.