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I have changed the timing gear out in several b18/b20's... I never bother to leave the pan gasket in there... I cut if off and clean the whole area up the best I can. I then use stuff called 'The Right Stuff'. It's black nasty crap that comes in a can like whip cream. It seals stuff like nobody's business. GM and Ford have gone to using the stuff on there assembly lines since it had higher rates of sealing than traditional paper gaskets. It's expensive (about $15 for a can) but worth it. I have yet to have one leak that I have used 'The Right Stuff' on... It also seals in several minutes but doesn't set up early. Use gloves with the stuff as it doesn't come off your hands except with steel wool and lacquer thinner...
Best of luck.
Chris
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