The PO neglected to mention it was dropped on its tail and tweeked the tail housing.
I suspect this may be more of your problem than anything else might be. I have seen some tight seals before – but seals make contact right away, and not an inch into it.
My guess is the tailhousing is buggered up somehow (shipping, dropped or something). Checking the bushing for roundness is not difficult – unless it is installed (like it is) for the output shaft is in the way.
Without the yoke, the output shaft will be a bit of up/down play on the shaft (which is normal). With a camera (video?) and light – "visually" check for distance between output shaft and bushing. Also check to see if bushing might have a bright spot on it (from contacting the yoke).
If bushing distance looks correct the entire distance – then it might just be the seal (being tight). Put some ATF on the outside of yoke (never install a propeller shaft yoke dry) and take a rubber mallet and tap on end of propeller shaft.
I have seen more than a handful yokes take a forceful bump with palm of hand to get past the seal - for the first time.
Note: the outer part of seal keeps mud and dust off of the yoke, only. The outer boot part can be removed – but I prefer to use them. The yoke moves in and out (of transmission) a lot more than people know (or think) about.
I have only seen 3 different kinds of slip yokes from Chrysler (early ‘60’s to 2000).
The 230/903/904/998/999 (ie: small yoke).
The 727/833 (ie: big yoke)
And the 48RE from diesel pickups (really big slip yoke – and makes the 727 one look tiny).
I have seen fully splined yokes (older ones) and yokes with a key in them (yours has a key) which most are). The key allows air to go towards the transmission when yoke moves inwards/outwards. The fully splined ones has a small hole on outer end to allow for air movement – but they tend to leak out the hole and are not recommended because of that.
That has nothing to do with your problem, though.
If there is a “non-lockup” vs. “lockup” slip yoke differences, then it is news to me – and I have man-handed a thousands of propeller shafts in my life.
They do make oversize bushings and seals for undersize slip yokes (seals for yokes that are grooved/bushings for damaged yokes that were machined down for re-use).
BudW