Ok, I got it done. Here is the skinny on what happened to me. The seal was not defective. It was just the wrong one. When you order the seal for the 82 300SD they give you this Corteco OEM part number:
011-997-22-47
You get a seal with a half flange around the top...looks like a baseball visor on one edge. I needed the one with the brim all the way around like a top hat. I checked the FSM and there are two different lower oil pans. One with a milled lip and one without. The one with the milled lip can take a half flanged or full flanged seal.
The milling is kind of a counter bore on the bottom oil pan that holds the seal from falling into the engine. My car didn't have that and needs a flange on the bottom side too.
The good news is I got the Elring seal and it has the flange all the way around. It looks like a nice seal. While I was in there I put in new tranny cooler hoses, upper and lower radiator hoses, radiator reservoir hose, all new Conti belts. I'm pretty happy and the car is quieter now.
Thanks again for all the support. I was so close to just putting the seal on the shelf for "next time". The pulley bolts came off with your tips of crushing a 12mm socket over the stripped hex bolt. The seal spacer ring just slipped off into my fingers...luck.
Oh yeah, and I heated my balancer on a portable butane stove on the driveway to 240F. I wrapped it in a couple of sheets of aluminum foil and put the burner on high. It took about five minutes to hit the appropriate temperature as checked with my cheapo non contact Harbor Freight thermometer...that seems to blank out at 210 F. Hah! Used Nomex gloves to pick it up.
Balancer slipped right on but was off a bit when it tightened up about ten seconds after setting it on. I drifted it around with a hardwood dowel and a mallet to get it lined up. Piece of cake. With all the tips here I can fool myself into thinking I'm good at this!
Now if I can just work up the courage to pound out my clunky ball joints.