You may be aware that there are services available that can machine the opening and upgrade the seal to the Mk3 design. The key, in any case, is to insure that the k/s shaft has a smooth nick/gouge free surface. Given the way the k/s return spring is installed the k/s shaft is commonly buggered with lengthwise insults which can quickly undo the integrity of any new seal.
The picture you posted indicates to me that the k/s arm has gone through periods of being loose, so do check the splines on both the arm and shaft for damage. Regaining a good, tight fit, when clamped, can be facilitated by Dremeling down 2 or 3 of the splines on each side of the opening on the k/s arm that allows it to clamp or relax.
If this was mid winter I'd have suggested you send the cover out for the Mk3 seal upgrade. Given that the riding season has started I'd suggest a new "O"/"X" ring, watch for leaks and check g/b oil level; next winter consider the seal upgrade.
Best.