I called Phil @ FairSpares and talked to him about the seals. I just installed the CNW e-start kit which by the way is a life saver, and the kit came with a new seal which I replaced. I swear, the old one was hard as a rock.
I put in the crank sprocket and it bottomed out on the case and seal. I sent the sprocket back to Matt which he then ground the back side of the sprocket for more clearance which he says some engines are cast differently and might bottom out. I put the thing together and noticed oil leaking out the bottom of the primary case.
I either damaged the seal due to the sprocket bottoming out or as Phil suggest I may have damaged it from the key way slot as it may have sliced the lip due to the slot having sharp edges.
Phil has sent 2 seals. One with a rubber coating and the metal one. So this time I will check for sharp edges plus I will wrap some Teflon tape around the shaft to help protect it when I slide it on.
The new seal went on tight but I will use sealer this time.