I spoke with someone from CaneCreek and showed him the photos. He was very helpful. He said that that O-ring is most likely an extra O-ring that shouldn't be there and I should take it out and try and seat everything. I'll give that a shot.
I can't get it around my head though that it would be an extra, how would it get in there? It worked fine before (with it in there I presume.) The only reason it came out is because I bumped the front wheel while everything is loose. What if I take it out and it's supposed to be in there somewhere? Could it be from deeper in the headset somehow?