Does the seatpost insert into the aluminum seatstay cluster and get clamped by it? Is it the carbon tube that has been worn? I'm not getting this.
Did the seatpost rock fore-to-aft in the seatstay cluster?
How did you ride it with a loose seatpost working back and forth to ovalize the hole and not notice it doing this? How did it not sink into the frame if it was loose?
It 'might' be possible to ream the hole round. I would prefer doing the job by indicating and clamping the frame off the side of a vertical mill table as opposed to using a loose ream in a hand-held T-handle and allowing it to follow the existing hole..
It 'might' be possible to hone the hole round using a Sunnen Horizontal Hone.
Doing either of the above may or may not affect the safety of the frame with the removal of material from the seat stay cluster and/or the I.D. of the seat tube . Proceed with caution.
1.000" =25.4 MM.
According to Sheldon Brown's database, Look used a 25.0 MM seatpost (.984"😉. If the 25.4 /1.000" post is too tight you may have a post that is too large for the existing hole by .016". It may be possible to turn this post down to .984, but not having seen or measured your frame...I have no clue if this would work or scrap the seatpost. It could also cause an unsafe seatpost due to the material removal.
Going up to 25.4 MM 'may' cause the post you bought to then fit...maybe. It 'may' clear up this ovalizing you mention. Measure and let us know where you're at, but it sounds like you need to see a bike shop experienced in frame repairs or at the very least visit a competent machine shop and see what you really have.
