In the process of building a518 with a lot of help from A&A trans (ridiculous how helpful and knowledgeable these guys are, HIGHLY recommended) and right now Im modding the factory OD Sun gear.
I had to drive out the old bushing and Im ready to install the new one BUT Im curious if it has to be slightl ysunk inside the ID of the sun gear like the old one as apposed to being installed flush. anybody know?

 

I'd try and get it in the same spot where the previous bushing was so it rides on the same spot on the intermediate shaft and does not start a new/prematurely failing wear pattern. If those bushings go bad and are that severly worn out, that usually means the whole trans has gone to lunch.