What and how much of what you put in the outdrives sort of depends. In most cases a single black o-ring works well. If however, you are using the rebuildable cvc, it can cause the suspension to bind up and not be able to be fully compressed. You may have to shave the o-ring a little which ain't easy. If you're running the plastic blade protectors, do not use the black o-rings.
The best solution I've found is to cut silicone fuel tubing to the correct length. The fuel tubing at my LHS was the same od as the o-rings. Put the fuel tubing inside a piece of brass tubing and slide out the amount you want, slice it off with a razor blade. The tubing is softer than the o-ring so it seems to work better and being able to make it any length you want has many advantages. Since only compressive forces are at work and no shear forces, it holds up well.
Jim, 1mm of fuel tubing with the R1Wurks CVD is about right for an M03.