You are attempting to use a domestic boiler machine as if it were a semi commercial or commercial type (say HX) machine.
Firstly I think you are grinding too fine and tamping too hard, for this machine. Machines of this type like a grind that is a little more coarse and a less heavy tamp, than semi or fully commercial machines. And the lack of group valve on this to exhaust the pressure in the group handle at the end of the shot, results in what you see in the spent puck. That's just the way it is....
Guessing that the "donut" (your words) in the puck is the continuing push of brewing water from the distibution nut after you stop the shot (due to lack of group valve to exhaust pressure.
Also reading your modus operandi, it seems that while you think you are flushing out the super heated water before brewing the shot, you are actually allowing it top build up again (the electric element is quite powerful given the very small quantity of water it is heating in the tiny boiler). Think about it. You flush super heated water out. The light goes ON (meaning it is heating up again). You leave it for 20 seconds and brew....by which stage the water is way up there again.
When I used these machines (and when I was starting out in coffee machine sales these type of machines were all there was unless you wanted to use a stove top), I just flushed the super heated water out until it stopped bubbling / ran quieter, and then made the coffee straight up...light on or not.
Hope that helps, and am interested to hear what others may advise.