No Mistake, perfectly acceptable method, I have O rings in several of my engines.
So You have a nominal 1/8" section O ring which is actually 0.139" or 3.53 cross section. This needs to be compressed slightly in the groove to give a good seal which will make the round section of the ring into an oval shape so the groove needs to be shallower than the 3.53mm but also wider and you also allow a little width so the ring can roll slightly.
For a piston in a steam engine you need the groove to be 0.160" 4.1mm wide and 0.132" (3.35mm) deep also deduct any clearance between piston and cylinder from this depth.
This is quite a bit looser than the standard SAE sizes you find in a lot of online charts as I said earlier which will just make for a tight engine that needs excessive pressure to run. Typically 1/2 to 1/3rd the compression of the ring from Andrews link
J
PS it's in the Reeves paper catalogue not on their site.
Edited By JasonB on 28/12/2017 19:32:26