This is my new Ford 9 inch rear and yolk and the new U joint they recommend does not seem to be a good fit what is your opinion
Th U-joint cap looks too small? There shouldn't be any play. This may sound ridiculous but did you try it both ways? They did make the U-joints with 2 different sized caps, 1-1/16" or 1-1/8", when Ford increased the size of the yoke and the driveshaft stayed the smaller size.
This is a conversion you join to adapt the 9 inch Ford rear I put in my 59 Chevy I have tried to different U joints and both of them fit the same way as though the yolk on the rear end is egg shaped
unless you can see abnormal wear that I can't, the egg shape you refer to is an optical illusion. Take that yoke in to the parts store and have them figure it out.
AFAIK, the machining in the yoke casting is a half-round, so the cap should fit pretty much snugly, without gaps. I could not begin to tell you how to correct that, but I have taken so many RWD drive lines off and put them back together that I at least know that is not normal.