Hi Brent. The groove for an "O" ring is quite a bit wider than the 
      "O" ring itself, leaving a space inside the groove for water to get 
      into. The "taper" in the groove is on the inside face and it's only a tiny 
      bit, under 5 degrees out of plumb. The bottom corners of the groove are 
      supposed to be rounded slightly. The Parker "O" ring "design book" 
      explains the function and has charts for sizes and many different types of 
      applications depending on what the "O" ring is trying to accomplish. 
      There's quite a few different types of groove shapes with some designs 
      based on a rotating shaft, sliding shaft, and a bunch of other 
      applications. The common function of all of them is to apply pressure 
      against the rubber and force it into a TINY crack.
      The "O" ring gets pushed up against the inside groove wall  as 
      the water pressure is applied. The "O" ring doesn't really deform into a 
      slightly rectangular shape until the pressure builds up enough to squash 
      the hatch down. 
      The groove needs to be wide enough to accommodate the "squared" "O" 
      ring and still leave enough space for the water to get in there so the 
      water is applying pressure to the "O" ring, forcing it up against the 
      crack between the two metal surfaces. It's a real simple design and can 
      withstand a LOT of pressure.
      Your rendering shows the taper on the outside groove wall and the 
      rubber "O" ring is filling the groove. That won't seal because there's no 
      where for the water to get in there so it's actually acting like a flat 
      gasket.
      The water would slip under the squared "O" ring because the pressure 
      is being applied to the gap and not "behind" the "O" ring. 
      Frank D.