I'm glad that someone on the H.A.M.B. was able to answer your question, Pete.
I JUST read your posting, but was scratching my head on the answer for the question. -It's been awhile!

Whether it was a T-86 w/ the R-10 od or a T-85 with the R-11 overdrive, the answer should be the same because of their similarity in construction.
Your '56 Merc should have a T-85 with the 9 bolt curved bottom side cover. -10 spline clutch disc input shaft, 16 spline ~1 1/4 inch O.D. output shaft.
Click the link below to see a picture of a '56 vintage T-85 w/ ovrdrive [NOTE: you'll need to scroll down on the page that opens]
http://www.ebay.com/itm/T85C-1A-transmission-with-overdrive-/221914115163?ssPageName=STRK%3AMEBIDX%3AIT&_trksid=p2047675.l2557&nma=true&si=hATz5cnvxT5qynNHYr6baFpjxhs%253D&orig_cvip=true&rt=nc Let us know how replacing that 'O' ring goes...
Regards,
NoShortcuts
a.k.a. Charlie Brown
near Syracuse, New York