1/8" total clearance across the axle? That would be pretty normal. You made sure no washers fell off, and the wheel keys were re-installed? A quick check of the parts manual will tell you the proper stack-up of parts and hardware. The "sleeve" axle looks to be seized to the wheel. I would suggest separating these and coating the inside of the wheel hub and the outside of the axle with an anti-seize. If you let this go too long you may need a press and a torch to get them separated.
Thanks, yes I am sure all the parts are back in the correct order. I fired it up and took a run around the back yard and all is well. Would you happen to know where I can get a manual for this? I find that the manual that comes with it is not detailed. Thanks for the help Steve