No problem Georgios.
Are you sure that the bulge forms in an actual situation? The picture that you provided seems like a schematic rather than an actual experiment. But if the bulge is expected to form, you may adjust the friction coefficient between the diamond and the gasket (while keep using a fine mesh), as well as adjusting the boundary conditions at the free end of the gasket that may be switched to a fixed support, for example.
Also, if you're using metal plasticity, you may check how the associated plasticity parameters can influence the results.
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