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I had the same problem when I replaced my shifter.
You install the O ring from the bottom (unfinished side) side of the shifter boot. Hard to explain, and the O ring is hard to stretch.
Put the chrome piece inside the boot and stretch the O ring over it into the groove in the chrome piece. Then fold back the boot and you are good to go.
It is hard to explain without pictures. Not sure my explaination is good enough.
I will be pulling mine apart in a couple of days to locktite the shifter rod and will try to take pictures then. However, don't have time until Tue.
Good luck!
You need to remove the shift boot and plastic ring from the console. Now invert the boot so the hole is at the bottom and the plastic ring is at the top. The finished side of the leather should now be on the inside. Now put the chrome ring in from the top like a basketball going into a net. Push it halfway into the hole and put the oring around the leather and chrome ring. Now pull down the ring and boot and replace in the console. I hope this makes senece.