You must have got a lemon!
It's hard to believe a seal can dry out and leak after only 40 years!!!
What's the world coming to?
Just get a new seal, pry out the old one and tap in the new one.
No special tools required.
Lube the outer edge of the new seal and just tap it in evenly and gently.
You can use an appropriately sized piece of pvc pipe or reasonable facsimile to tap it in, if you're more comfortable with that.
Wrap some masking tape around the splines so the new seal slides past them easily.
There's also a paper gasket behind that cover, but that rarely leaks.
Make sure all the bolts behind the brake shoes are tight.
In the event that the gasket is leaking too, just remove all the bolts and pop the cover off, clean everything and re-install it with a new gasket. Again, no special tools needed.
I just use a bit grease on that gasket, no sealer. You might get differing opinions on this.
To finish up, rough up the brake shoes with 320 grit sandpaper backed with a hard rubber pad, not your finger tips.
There's also a inner seal, if that one leaks it will be obvious at the tiny hole in the outside of the casing below the axle nut. (edit: on some models)
It's not a big deal to change but it usually lasts '
virtually' forever.
but only 14Kkm away! 
