Looks like it goes above #8 and both go on the top of the main internal part #9.
Welcome to the forum Jeff. I watch your youtube. You have some entertaining stuff. I'll go and review your video on the swivel.
My best guess is that it goes at the bottom as a dust seal and someone has got the callouts in the parts book mixed up. Is there any kind of counterbore or chamfer in the bottom of the outside housing? Also, I think this may the first time I've seen a swivel with plain O rings for the main sealing areas. Where I have seen ones with O rings, they have been as expanders for square section seals. Much like the two-piece piston seal on a hydraulic cylinder.
I studied the drawing and I've come to the conclusion it goes on top to seal the inside diameter of the barrel and the other one goes on the top OD of the cylinder to seal debris from ingress through the top plate hole in its center
I believe you are correct
Cmark might be right too that the parts book is marked wrong and it goes on the bottom.