The seal goes in with the lip facing the inside of the trans, and then the clip goes in resting against the seal. The clip does not go inside of the seal. Push the clip into the hole, split side down, until it is below the surface, then using a deep socket that will fit inside the hole, rotate it and push it down into position. So again, push the clip into the hole vertically, then once it is below the surface, rotate it until it is perpendicular to the hole. A socket that just fits into the hole works best to get it rotated, and pushed into place. I do this all the time with piston pin clips.