My Magdrive leaked there too. To seal it up take the impeller housing off, put a thin bead of silicone around the existing 'O' ring, and screw the impeller housing back on, cleaning any excess silicone that squeezes out.
Presto! One sealed pump. The downside of this is getting the impeller housing off if (when?) it starts to leak is a right pain in the ass, as silicone is a very good adhesive.
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