Hi. If your original cam has no no oil groove in its first journal and theres no evidence to suggest that anyone has ever put the wrong one in then thats one issue out of the way.no groove when there should be would result in NO oil feed to any of the head!.so thats ok then. If you have blown out all the oilways and you can get air coming from all the rocker studs that should be ok too. Yes the pound coin sized rubber o ring is water feed.once all is cleaned up and you are ready to fit head back on make sure the rear 3 bolt cover is leak free.its a bugger to get to afterwards.when you are ready to put gasket on i usually put a VERY thin smear of silicone gasket sealer down the left and right sides of block and head and the join between engine and timing case.reason.over time with contant heating and cooling,unknown antifreeze history etc etc water can have a tendancy to very slighly seep out of the sides .because of some slight deteriation to the surfaces.whilst not causing any onvious leaks or problems it just looks a bit unsightly .the sealer stops this happening. That what i do anyway. Gasket located on pegs,o ring in,cam in ! Lower head onto pegs.fit head bolts and tighten in sequence all hand tight first then as required. Early bolts with the splined heads are not stretch bolts and can be reused .i beleive the later bolts with allen heads were and need angle tghtening.all my cars use splined bolts and have never had any issues with re using them.they just need retorquing after 500 mile.