So one of the guys over at Grassroots Motorsports forum just so happens to work for Webasto. He saw my incorrect fuel line and sent me a roll of the correct stuff! Apparently they actually use the fuel line ID as part of the fueling system metering. Too large of an ID (like my rubber) will actually over fuel the heater. He said it would likely work fine for a long while, but eventually it will kill the fire box. The pulse pump needs the restriction I guess.
Correct stuff.
So I got around to installing it between the fuel pump and heater last night anyway. Uhhh yeah no good pictures under there, but its clear tubing in place of the rubber.
Still rubber to the tank, not exactly sure how I will get around that one yet, but its only about 24"