Looks like the wrong seal if it can't stretch enough - maybe a serial number break change? The old one appears to be an O-Ring that would stretch enough to get over the sides and into the "gland". If it didn't cost too much, you can always try to stretch the new one and if it breaks - oh well. If it installs - oh boy! Did you checked the Kubota parts diagram for this seal part number, or was this selected by the parts department? It's worth taking the time to get the right seal installed so you won't have to go thru this all over again if the wrong seal fails quickly.
Here's the "O-Ring bible", overkill unless you have a keen interest in material selection, sizing and function:
http://www.parker.com/literature/ORD%205700%20Parker_O-Ring_Handbook.pdf