I would take off the water pump, and sprocket to give you more room.
Round out and tidy up the old hole like djsin suggested. Don't make it too big or the seal will fall out.
It is just friction fit.
In looking at that seal the hole in the center is the part that needs to stop the oil from coming through, and the oil behind it is not under pressure, but just splashes onto the rod.
You could try and cut a small bevel onto the back of the seal, so when you start it, it will go in easier.
Use a proper sized bearing seater, or a socket turned backwards to gently drive it in.
Put a little grease in the center hole, before you put the rod back in.
Good luck