So i'm completting to process of doing a gear swap but for the life of me I can't figure this one out. Both the right and left wheels have about 1/8" play at the outer end. One side has new bearing and seal, while the other was untouched but both have play

 

Are you talking about in/out play? Or up and down play?
Most of the JK rear axles I have seen have some in/out play in them.

 

seems to be in/out play
if i grab the wheel centered on left and right and push in/pull out i can feel the play

 

I haven't measured, but it's common to have some in/out play.

Make sure the 4 bolts on each retainer plate are tight.
See if you can get an actual measurement of the play. I'll compare it to what mine has.