Kathy -
this is very normal and is what some of us BAHA users on the Forum have referred to as a "divot". You want the abutment to kind of sink down so that the processor doesn't sit too close to your skull. If it does, it won't work properly.
So don't worry - you are right on track as far as I can tell. Remember though, that I'm not a doctor - so if you have concerns you might want to call yours.
I found the itching while my site was healing to be insane. I felt like I wanted to claw my head off at times
Someone told me to try an antibiotic ointment (along the lines of bacitracin and/or neosporin) that contains zinc. Supposedly the zinc helps. I eventually stopped itching, but honestly I'm not sure if it had anything to do with the zinc or not.
Good luck - and wear mittens if you have to so you don't scratch. Maybe Lori and I should start including a pair in our BAHA Recovery Kit
Jan