The o-ring should be a snug fit, if it hangs out, it will get cut and not provide any sealing.
Were the o-rings packaged separately, any part numbers on the packaging, sounds like you got one that is for another bike.
Do you have any zip ties / ty-wraps, may be able to compress the ring enough to install it.
I know they can be installed by hand, without any special tools, but the rings are quite sharp, and you will cut up your fingers in the process.