I don't how Toyota installed the seals from the factory. However, I do know those spring assisted seals are meant to seal in ONE direction only. The spring side (or non-flat side for those seals without a spring) should be facing the fluid that you're trying to seal in. That is how it was designed to work. Just look at any of the other seals on your car on the steering box, axles, etc. The spring side will always face inwards, torward the fluid. The theory behind it is, the pressure of the fluid will assist in keeping the seal held tight against the shaft or wall. If the fluid pressure were coming from the flat side, it would have a tendency to easily compress the spring (or seal) and allow fluid to pass. Unlike an O-ring, which seals equally well in either direction, there is a large difference in the sealing ability for these types of seals based on which side the pressure is coming from.
So if the fluid is transferring from the transfercase to the transmission, the spring should be facing the transfer case, because that is where the pressure is coming from. I always assumed that if there were to be a leak, that the fluid would flow "downhill" into the transfercase, but apparently it's just the opposite. Not sure why that is, seems to go against conventional thinking. Maybe Toyota didn't realize that the fluid would have a tendency to flow uphill when they installed the seal in the first place?
oh yeah, just like everything else in life, make sure it's lubed up properly. Dry fitting can damage the seal.
Edit: Damn, I didn't realize this thread was so old.