I recently got a rear end put in with brand new axel seals. Now I am getting oil seepage, I know that it is gear oil because of the smell. What could cause them to go bad?

 

If there isn't a groove cut into the axle shaft from the old seals, chances are either the seals were junk, or maybe installed dry and burned up. I always put a little grease or gear lube on the lip of the seals. I burned up 2 sets on my Jeep before I figured out that I need to put lube on them.

 

What do the axle bearings look like?

They're the usual cause of leaking seals.

 

i'd go with RB and say bad bearings. my second guess would be you installed the seals dry and they got fried.