oh yea it floats around with out the seal and moves easy with seal in - until I get close to turning the bolt to where it was when I took it off. doesn't the seal get compressed up against the inner steel ring? the steel ring that is in front of the bearings? I thought it was a circlip but I do not see any holes in it.

No. The seal rides around the flange body, not behind the flange.

Mystery solved! Well I finally had a chance to get back under the Rover and pull the flange and drive shaft back off for another inspection and put in the a new seal and flange kit. When I was trying to clean the mystery ring, which I previously thought was a huge washer jammed in there, I noticed it was hacked up pretty good. I got out a big screwdriver and wanted to see just what the hell was going on in there and started to pry to see if I could get the damn thing out. After some prying it came out and Duh it was the old seal worn down to the mental interior and basically fused into place by the heat. So got it out, cleaned it all up nice and now I see I do in fact have the basic circlip holding in the bearing. Replaced with the new flange and seal and it tightened up just as it did before! so now I have a new seal ( again) , new flange and have re-sealed the bottom cover and the MF is still leaking! Guess I'll clean it up again and see if I can track down the leak...ugh what a PITA!

Did you ever find the leak?