Hello, I have done similar analysis with a lip seal. You have large displacements and a non linear material so your assumption is right on to go the non linear route. I think that the 1000 time steps is excessive. Start lower like around 100 and when you don't get proper results increase. There could be a point where the surface contact starts to act strange due to the applied pressure. That will be when you may stop the analysis and use what you have. Be prepared to adjust the stiffness of the surface contacts.
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David Harhay, P.E.
Principal Engineer
Fives Bronx, Inc.
8817 Pleasantwood Ave. NW
North Canton, Ohio, 44720 - United States
Tel: 330-244-1960 ext. 264 Fax: 330-244-1961
david.harhay@fivesgroup.com
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Dave H