Never heard about that Permatex product but Ultra Gray by Permatex is often a suggestion. Hylomar has been used in the past. Another that I recall is something called Yamabond as well as Driebond. Here's a couple of sites that discuss seal replacement:
http://www.pbase.com/dqmohan/prtseals
http://www.gunsmoke.com/motorcycling/r100gs/pushrod_tubes/index.html
http://www.pbase.com/dqmohan/prtseals
http://www.gunsmoke.com/motorcycling/r100gs/pushrod_tubes/index.html