That's interesting. I've never had that happen. Just as you, I put the bushing on the trans shaft first to see if it fit. When I knew for sure that it did, I pressed it into the flywheel. I'm surprised the size would change that much. You probably could ream it while the flywheel is installed on the engine. I'm not sure what you might use to ream it. A cylinder hone may work but it may take a while with using one. Is it possible the bearing has a burr on it from when it was pressed in? If so, a bit of filing with a round file may take care of it. As far as a tool, I couldn't suggest anything to use. Perhaps someone on here will see this and have a suggestion. Otherwise, I bought the bearing I used on ebay from the seller who goes by ID stude4x4. I see right now that seller has no active items.