I think you are right, something doesn't seem quite right on that water tube. Seems like it would be next to impossible to get a good seal how it is, and you need one, or you lose most of the water pressure before it ever gets to the power head.
That rubber grommet doesn't go into the water pump housing first, does it? Almost looks like there's a lip in the housing where the water tube goes, that matches a groove in the tube grommet.