Sounds like as Doug said, you are measuring the balancer at the wrong spot. The balancer has a stepped inner diameter and the only way to measure the proper diameter is with a dial bore gauge that you can put further into the balancer.
If it is a new balancer, chances are you don't have to change anything. The early balancers were made a little smaller in diameter and always required honing. BHJ may not admit to this, but they have increased the size of their balancers recently. I've not had to hone one in quite awhile. Generally if you can slide the balancer on far enough to engage the keyway by hand, then you won't have to hone anything.
Be sure to use anti-seize on the hub, and a little bit of RTV on the keyway before pressing it on, and be sure to use the proper tool to draw it up rather than risk damaging the threads in the crankshaft. If you got the balancer from Spinningwheels SC, they provide a new slightly longer crankshaft bolt with the balancer. I don't recommend using the original bolt.