There's a gear (usually plastic) at the tranny end of the speedo cable that connects to another gear in the diff (most likely). One of my trusted talyer's assistants accidentally dropped the plastic gear inside the tranny and they had to take it apart to get it out again at their own expense. The assistant is still the butt of jokes during inuman sessions hehe.

Did they clean out the seat of the oil seal before putting the new one in? The old one might have left a bit of residue causing the new one to not seat properly.