Glennbob,
My gear leg fairing/flex solution was similar to yours. Just make sure that the line is cut so when the gear flexes it moves clear and doesn't contact the fairing. It won't damage the gear but it could damage the fairing (unless you've built some macho fairings).
As for the NACA duct, David is correct. The smoother the better. Think of the NACA duct as creating a vortex on each side of the centerline flow, gently ushering the air into the duct. Naturally you want that centerline as smooth as possible, especially further forward in the duct.
The diffuser is for a different reason: look up "vena contracta" in google images for a good illustration. Basically, air inside the engine bay is drawn toward the inrushing air from the NACA duct. However, if there is a sharp transition at the end of the NACA duct (say, at the firewall), the momentum of this engine bay air actually narrows the airstream from the NACA. Presto, all that hard work getting the air to flow freely has just been negated and your inlet hole appears smaller to the airstream than it actually is. Cooling becomes less effective, cooling drag increases, and fast-moving air swirls around erratically inside your engine bay, making it difficult to cool the cylinders equally.
I wrote the words "Free Beer" on my diffuser. Haven't had any issues getting air to enter.
- Andres Pico