Yes, it's normal for that red ring to have a split on the side. The Minton Mods were conceived for the later 35mm forks. The later damper rods differ slightly from your early ones in that they are pretty much wide open at the top .....
I've been giving some thought to how the Minton Mods might be applied to the early forks and I'm thinking the more closed off damper rod tops may be the "choke point" impeding oil flow. Along with slightly enlarging the bottom holes, you may need to open the tops up more somehow. Unfortunately, the holes up there are very close to the top edge so they couldn't be drilled out very much larger. But maybe you could grind the sides and bottom larger using a high speed cutter in a Dremel? .....