Sounds to me like you got a defective one or something. Mine has worked just fine for quite some time, and I've taken it on and off quite a bit.

Are you putting the O-ring on the shaft or in the knob before assembling? You should be doing the latter.

Are you sure that the knob isn't getting caught on the lens while pushing it in? I've found that that can be the case if you're not a little careful. I've found that not tightening down the fascia all the way until after the knob is on helps.