Yes You have the wrong oil seal
Oil seals should be a class IV transitional fit or a class V interfearence fit
A type IV should be able to be fitted with finger pressure or a light mallet
A type V should be able to be fitted with a "Light Press" or heavy mallet.
Oil seals should be around these tightnesses
https://www.engineersedge.com/class_iv.htm
GO down the table and for the seal diameter of around 2.5" your crush should be between 0.0002" to 0.0024" .
This is a tad looser than the measured 0.067"
With oil seals , the crush is generally the thickness of the rubber that coats the steel case so removing & replacing it will not damage the hole ( in theory ).