360 crank has a large oil seal groove
Man do I feel stupid, Yeah now that I pulled my head outta my butt I do recall that the oil seal goes around the balancer just like it does on my 318. Sorry for the false alarm. Thanks for the smelling salts guys.
I looked at a picture of a 360 crank on ebay and the groove is machined in that one too. Not sure what it's for though.....