Sorry you're having trouble with the t-case. If you did not make any mods to the rods or pills, perhaps yours won't shift because one of them is in an interlock position that won't allow the other to move? I'm guessing you tried both levers in both directions, but that's the first thing that came to my mind anyway.
As far as needing the seal, I think it was stated pretty clearly all along (pretty sure at least), with no change to that info that I saw, that the ZF kit will always require the seal. I say that only because I don't remember anybody saying there was a "new" version of that manual trans adapter. The only one with a new version was the actual correct AOD/4R70w automatic trans adapter kits.
So as far as I know (and even if there had been any kind of an update to the ZF kit), you're going to need that seal no matter what.
The extra 135 bucks for the proper kit is presumably for the extra cast housing, some additional machining to what is (I believe) essentially the same shaft otherwise, an o-ring and a seal.
Not sure why AA doesn't simply add the extra machining cost and a seal to the ZF kit, if it's that good of a fit, but when I talked to them a couple of years ago about it, they didn't have any plans to change the lineup.
Paul