Attached is a pic of mine installed. I think this is right (please let me know if its not!).
FNQ, I'm no expert but I think if you run some longer fuel line from the outlet of your filter so that you can have the transducer facing like this (ie. fuel flows up into the transducer), it may help your problems. I think the transducer needs to be mounted this way up so that when fuel flows through it, its traveling up, and so gravity minimises the chances of any air building in it.