Any idea what caused the seal to blow out.

Well most likely the crank has some play in it, the seal could have not been properly, or like Jerry said it was hydraulic, and the compression forces from the cylinder blew it out.  Since it was not a lot of oil it was just 2 stroke oil build up.

I would either get a new seal and put it in or use a little thread locker and put the old one back in, if it's in good condition.  Problem with using the thread locker and the old seal is that it may blow out again if the seal integrity has been compromised.  I would also use a little white lithium grease on the inner sealing lip when installing it.

Even more importantly than that, is once the crank seal is compromised (or blown out) you now have a air leak and if your stator cover is not sealed good and your stator harness plug is not good then your drawing in air that does not have fuel and OIL in it.  This will cause a lean condition and likely lead to piston seizure or failure depending on how hard your pushing it, possibly breaking other things as well at the time of failure.

Get a good crank seal in there and see how it runs and check to make sure it does not blow out again. 

Then you can jet the bike properly once your engine is sealed up.