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My cover was scored (circular, from the impeller wearing it) enough that you could see it easily, and catch it with a fingernail - maybe 1/32" - 1/16" or so.
Yours sound OK. I am not a mechanic, so maybe someome else can chime in. I think that if your raw water pump and impeller are in good shape, you shoudl not have water or air bypass it. I don't think any air leaks are good. However, air is always in the exhaust elbow, yet doesn't make it's way back through the heat exchanger, and then water pump. Your possible leak is quite far down the line, so it may not be an issue. I do think any leaks / loose clamps near the pump would facilitate the loss of prime.
Let us know how you make out.