Well... at least we know where your cavitation was coming from.
Normally, there is a retaining clip on the driveshaft behind the stainless ring. This clip holds pressure on the carbon ring. (and will keep the driveshaft from sliding out)
The original design used a rubber O-ring. They would dry out, crack, and fall off. Once that happens, you loose the tension on the carbon ring, and you will get bad cavitation. When you put it back together... you will want to replace it with a new style metal C-clip. (I'm sure your cavitation will disappear)