I was able to get the contact to work by creating the problem as an assembly which allowed me to create the model with no spaces between parts. However now, I notice the corner issue. How do we tell the software to create spring elements when the parts are not contacting each other initially?:
In the image, you see I took that gasket out where it is flat so I could constrain it flat. that worked as expected. However as soon as we go over the cusp, the contact regions are ignored and the slave (the gasket) can penetrate into the master.
Here the pink is the slave and the red is the master. The master surface is extended so it is not contacting initially.