I have given this some thought lately as I was asked not long ago regarding the installation of the seal in the torque tube.
I gave the INCORRECT answer by stating that the seal was intended to keep the oil in the rear end housing from going forward. I gave this answer in spite of the fact that I was told an NOS torque tube had the seal installed in a manner that prevented oil from going down into the torque tube.
After thinking about all that I have learned, I have the current thoughts regarding this universal joint lubricating 'situation'.
The universal joint housing has a grease fitting, not a filler plug, indicating that it is supposed to have grease in it. All the u-joint housings that I have seen, the grease residue in it has had the grease formed to the outside edges of the housing indicating that the spinning u-joint has displaced the grease from around the u-joint bearings themselves.
I dis-agree with those that promote putting seals in the transmission bearings if they think that they are stopping the flow of oil out of the rear of the transmission. If you look closely, the shaft that the u-joint mounts to is splined in the area that goes thru the rear bearing, still allowing the oil to go past the rear bearing, just at a slighly higher oil level.
It is my opinion that the u-joint housing is filled with grease first, knowing that it will cavitate around the spinning universal joint, allowing for a smaller amount of the transmission oil required to fully lubricate the u-joint. This oil is supposed to 'leak' thru the rear bearing into the u-joint housing and is prevented from going further downstream by the seal in the front of the torque tube.
If you look at the position of the oil filler plug relative to the u-joint housing and the torque tube seal this becomes a little more clear. I am certainly open to input on this matter if some one has an alternate view.
My apologies to my fellow Fordbarner if you used my input in assembling the torque tube seal in your 'unit', I did not think of it in this manner at that time.