Erosion on the inside of the o-ring next to the bore is a sign of detonation or the machine work is exposing the o-ring to the flame in the combustion chamber.  The o-ring should NEVER be able to "see" the flame!

Detonation can be caused  by any one of or a combination of the following:

1. Low octane fuel
2. Incorrect ignition timing
3. Lean fuel mixture
4. A bad cylinder head design
5. A bad exhaust pipe design
6. The LT 250/500 power valve sticking open