Changing the rear wheel inner seal for the second time on my 96 Sportage. First time the replacement seal was the same as old seal which seals around the bearing retainer. The new seal I just got yesterday is different and smaller. I don't even know if it will fit but it looks like it will sit deeper in the axle tube and seal around the axle shaft. It's the right part number according to Autozone and Oreillys. I will try to do a fitment check tomorrow. Does anybody know if there was a design change or something? When I replaced it the first time it didn't last very long.

update: One I had didn't work. Went to 4 different auto part vendors and none had the correct part. Dealer is special order item. Ended up ordering some from Ebay. Went ahead and ordered some Timken bearings too. I remember the Oreillys bearing retainer was slightly larger than oem and I think that was what tore my inner seal up.

I should have taken pics but I just did ALL the bearings and seals in the rear axle of my 2001 (Even the diff as the pinion bearings were worn causing gear whine). So being I have the 28 spline axle may be different than your 1996?...

But anyway, in case any of it helps. On the 2001 there is a small seal that goes in the end of the axle tube. And the big seal that goes between the bearing and retaining plate.
The bearing on mine was held on by a threaded nut with a special washer that has tabs to bend and lock the nut into place (one side has reverse threads).
for the ends of the axles I got all the bearings and seals from a combination of Oreillys and Carquest.
I got the new locknuts and washers from the dealer for about $30. It looked like I could re-use those but KIA says to replace and for the price I figured it was worth it.

Like I said though your 96 axle sounds slightly different...

The '95-'97 and '98-'02 axles are essentially the same design. They upped the spline count from 26 to 28 and increased the diameter of the bearing journals starting on the '98 models. So the seals also differ in size. If I recall correctly from my upgrade to a 28 spline axle on my '97 Sporty, the 26 spline axle also has an inner and outer seal. The inner seals are easy to replace. The outer seals have to be installed between the bearing and the axle hub. So you need a hydraulic press to remove and install the bearing (plan to replace the bearings with the seals - the process of removing will likely destroy the bearing). Just make sure you have the right parts. I'm pretty sure I have the bearings and seals for the 26 spline axle set. I never used them because I had to go with the 28 spline axle to install the Track Finder rear locker. Let me know if you need them.

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Sorry - didn't read your first post thoroughly before replying. I thought the inner seal was supposed to seal against the end of the bearing journal on the shaft. If the bearing retaining ring is too tall, it might have rubbed against the seal or pushed it farther into the axle housing. I never did anything with the '97 axle as far as pulling and replacing the bearings and seals. The '98+ axles all use a threaded retainer that screws onto the shaft and is secured with locking-tab type of washer. It's a nice design - beats using a grinder and a chisel to the split the old retainer. If you need the seals and bearings, let me know. I can measure the retainer thickness to be sure they are the right ones.