The fibre washer should NOT be compressed, they are there to buffer between the flywheel housing and the mounting points on the inner transom plate if the engine kicks over under an exceptional condition (it should never happen, but if it does, the fibre washers protect the cast ali parts...) What you have it completely correct. It's actually one of the tests I do when I put an engine down, make sure the fibre washers spin... That way I know I haven't trapped one and changed the mounting height...
Chris.....
