I had water blisters using the vacuum hanger when I first stating using some time ago. It seems I was using much too much weight (I tried using the same weight as I was using with the Bib hanger).
Since then. my solution has been to limit the weight to 5 pounds. I also remove the hanger every 10 minutes to check for blisters.
When starting my hanging session, I ensure that the glans is as far forward in the inner (constriction) sleeve as possible. I also put a small wad of toilet tissue between the tip of the glans and the inside of the constriction sleeve to absorb an possible moisture that may develop.
I have been reluctant to hang with more that 5 pounds, as I tend to develop those water blisters easily. Perhaps some experimentation with higher weights is in order (for me, at least).
-damfino