This type seal is meant to be pressed in place with an arbor and press. In the real world the old seal works pretty well when combined with a vice. I'd imagine you can gently tap it into place. A socket with a slightly smaller O.D. than the seal makes a good press tool if the old seal is damaged.
My sealant preference is Permatex Ultra Blue. A bit more expensive but it can seal on oily surfaces, doesn't stink, and is easy to work with. Its the only sealant I used to use on industrial printing presses because oil leaks suck.