diff --git a/packages/paperclip-runner/devtools/browser/src/live/use-live-console.test.ts b/packages/paperclip-runner/devtools/browser/src/live/use-live-console.test.ts
index 43d7b46fac2..8542950c832 100644
--- a/packages/paperclip-runner/devtools/browser/src/live/use-live-console.test.ts
+++ b/packages/paperclip-runner/devtools/browser/src/live/use-live-console.test.ts
@@ -6,14 +6,14 @@ import {
   createLiveEventCursor,
 } from "./use-live-console";
 
-function event(sourceEventId: string): PrpEvent {
-  return { sourceEventId } as PrpEvent;
+function event(sourceEventId: string, sourceSeq: number): PrpEvent {
+  return { sourceEventId, sourceSeq } as PrpEvent;
 }
 
 describe("Live console reconnect cursor", () => {
   it("does not advance past an unseen event when replay delivers a duplicate", () => {
-    const first = event("source:event-1");
-    const second = event("source:event-2");
+    const first = event("source:event-1", 1);
+    const second = event("source:event-2", 2);
     const cursor = createLiveEventCursor([first], 1);
 
     expect(acceptLiveEvent(cursor, first)).toBe(false);
@@ -22,4 +22,12 @@ describe("Live console reconnect cursor", () => {
     expect(acceptLiveEvent(cursor, second)).toBe(true);
     expect(cursor.cursor).toBe(2);
   });
+
+  it("uses the durable source sequence after the server compacts retained events", () => {
+    const retained = event("source:event-4097", 4097);
+    const cursor = createLiveEventCursor([], 4096);
+
+    expect(acceptLiveEvent(cursor, retained)).toBe(true);
+    expect(cursor.cursor).toBe(4097);
+  });
 });
diff --git a/packages/paperclip-runner/devtools/browser/src/live/use-live-console.ts b/packages/paperclip-runner/devtools/browser/src/live/use-live-console.ts
index a2c6a903a9d..4d90f21916b 100644
--- a/packages/paperclip-runner/devtools/browser/src/live/use-live-console.ts
+++ b/packages/paperclip-runner/devtools/browser/src/live/use-live-console.ts
@@ -42,7 +42,7 @@ export function createLiveEventCursor(
 export function acceptLiveEvent(cursor: LiveEventCursor, event: PrpEvent): boolean {
   if (cursor.seenSourceEventIds.has(event.sourceEventId)) return false;
   cursor.seenSourceEventIds.add(event.sourceEventId);
-  cursor.cursor += 1;
+  cursor.cursor = Math.max(cursor.cursor, event.sourceSeq);
   return true;
 }
 
diff --git a/packages/paperclip-runner/src/mock-core/live-console-demo-server.test.ts b/packages/paperclip-runner/src/mock-core/live-console-demo-server.test.ts
index 391c770c1c6..54b30cc5481 100644
--- a/packages/paperclip-runner/src/mock-core/live-console-demo-server.test.ts
+++ b/packages/paperclip-runner/src/mock-core/live-console-demo-server.test.ts
@@ -14,7 +14,11 @@ import type {
   PersistedHarnessSession,
 } from "../contracts/harness-driver.js";
 import type { PrpEvent } from "../protocol/replay-contract.js";
-import { LiveConsoleDemoServer } from "./live-console-demo-server.js";
+import {
+  liveEventCursor,
+  liveEventsAfterCursor,
+  LiveConsoleDemoServer,
+} from "./live-console-demo-server.js";
 
 const OPAQUE_BROWSER_CREDENTIALS = {
   clientSecret: "opaque-client-secret-value",
@@ -26,6 +30,20 @@ const OPAQUE_BROWSER_CREDENTIALS = {
   cookie: "opaque-cookie-value",
 } as const;
 
+describe("live console durable cursors", () => {
+  it("replays unseen retained events after positional compaction", () => {
+    const retained = [
+      { sourceEventId: "event-4095", sourceSeq: 4095 },
+      { sourceEventId: "event-4096", sourceSeq: 4096 },
+      { sourceEventId: "event-4097", sourceSeq: 4097 },
+    ] as PrpEvent[];
+
+    expect(liveEventsAfterCursor(retained, 4095).map((event) => event.sourceSeq))
+      .toEqual([4096, 4097]);
+    expect(liveEventCursor(retained)).toBe(4097);
+  });
+});
+
 class Queue<T> implements AsyncIterable<T> {
   #values: T[] = [];
   #waiters: Array<(value: IteratorResult<T>) => void> = [];
diff --git a/packages/paperclip-runner/src/mock-core/live-console-demo-server.ts b/packages/paperclip-runner/src/mock-core/live-console-demo-server.ts
index 28035f52a1f..71cd3909e4d 100644
--- a/packages/paperclip-runner/src/mock-core/live-console-demo-server.ts
+++ b/packages/paperclip-runner/src/mock-core/live-console-demo-server.ts
@@ -91,6 +91,17 @@ interface BrowserCreateBody {
   startTurn?: boolean;
 }
 
+export function liveEventsAfterCursor(
+  events: readonly PrpEvent[],
+  after: number,
+): PrpEvent[] {
+  return events.filter((event) => event.sourceSeq > after);
+}
+
+export function liveEventCursor(events: readonly PrpEvent[]): number {
+  return events.at(-1)?.sourceSeq ?? 0;
+}
+
 function record(value: unknown): Record<string, unknown> {
   return typeof value === "object" && value !== null && !Array.isArray(value)
     ? (value as Record<string, unknown>)
@@ -653,8 +664,8 @@ export class LiveConsoleDemoServer {
       const url = new URL(request.url ?? "/", "http://liveConsole.invalid");
       const after = Math.max(0, Number.parseInt(url.searchParams.get("after") ?? "0", 10) || 0);
       json(response, 200, {
-        events: entry.events.slice(after),
-        cursor: entry.events.length,
+        events: liveEventsAfterCursor(entry.events, after),
+        cursor: liveEventCursor(entry.events),
         replay: after === 0,
       });
       return;
@@ -678,7 +689,7 @@ export class LiveConsoleDemoServer {
       // last event, and Node would otherwise hold the response open with no
       // bytes sent, leaving the browser stuck in CONNECTING.
       response.write(": stream open\n\n");
-      for (const event of entry.events.slice(after)) {
+      for (const event of liveEventsAfterCursor(entry.events, after)) {
         const output = serializeBrowserJson(event);
         if (!output.overflow) response.write(`data: ${output.serialized}\n\n`);
       }
@@ -882,7 +893,7 @@ export class LiveConsoleDemoServer {
       pendingRequests: entry.session.pendingRuntimeRequests?.() ?? [],
       goal: harnessSnapshot.goal ?? null,
       lineage: entry.session.lineage?.() ?? [],
-      cursor: entry.events.length,
+      cursor: liveEventCursor(entry.events),
       snapshot,
     };
   }