If you will pardon the pun, I am a bit "stuck" on this one. Having never done this myself, the parts pictures are the only thing I have to go on.
Using an O-ring in this application can be a bit fiddly because everything has to be just right to get the proper fit for sealing and yet allow it to all go together without damage to the ring.
You said that you lubed everything with hydraulic fluid for assembly and I am betting that you checked everything for burrs or rough edges before you started. Can you get the piston out or is it really stuck? If stuck you could try a little compressed air in the oil port to see if you can nudge it out. Insert standard precaution about catching flying pistons, etc. here.
The only thing I can think of is to get it apart and double check everything. You could try putting the O-ring in the cylinder to see if it fits without bulging inward indicating that it is too big. Also check to see if it has rolled causing a twist which can change its dimensions. Another option is to try another O-ring if you have one. Also carefully measure to see if this one meets specs.
IF all is well then perhaps you can fashion some sort of installation sleeve that lets you slightly compress the ring before it gets to the cylinder. In this application you could probably even chamfer the open end of the cylinder because the seal should never reach that part of the cylinder during use. This would have to be really well done and polished as to not damage the seal.
Did you pre-lube the cylinder completely so there are no dry spots? I would use the slipperiest stuff I could find and use lots of it. Heavy oil, grease, lubri-plate, whatever. It will dissipate into the fluid and not cause any harm. STP mixed 50/50 with hydraulic oil would make a good lube as it will be slippery and stay put while you get it all back together.
Another trick I have seen done for close fits is to warm the cylinder up to a couple of hundred degrees and put the piston with installed bits in the freezer for a while and let physics help as much as you can.
Hopefully someone who has actually done this repair will chime in with a better answer.
