You probably either got the wrong seal or didn’t properly seat the seal. I doubt the housing is machined larger than factory but you never know with these things. It’s also possible the axle shaft has issues such as corrosion on the sealing surface. Clean it up all nice and shiny.
Look at Jeep Solid on YouTube.
has one of the better videos on making the tool to pull the seal into the housing. I believe it only cost around $10 to make with threaded rod, a few nuts, and an assortment of large washers.