I finally figured it what works, at least what worked for me.

I should not have read the two paragraphs in the FAQ talking about reinstalling the gasket with the sender. While the advice of fitting the sender before installing the gasket is good, the way the FAQ went on about the gasket being bifurcated, rocking it in, etc, etc, made me think way too hard and had me installing it incorrectly.

I would suggest all that be condensed into:

After checking the sender for proper fit, withdraw it enough to work the gasket over the top of it. Then install the gasket fully to line the hole and slide the sender into gasket.
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Andy in St. Paul - '91 745 218K mi, '91 745 210K, '90 744 189K, all Rex-Regina - past 240s