I use black Toyota sealant, the kind they sell you with a water pump that
doesn't use a paper gasket or o-ring.  Spendy - like 18 dollars US a tube,
but quite good.

I recently wrote a big thing, so don't want to do it again, but put the
heads on temporarily with a few nuts and measure the gap for the outer water
gasket. ( metal rings have to be on top of the barrels of course ) .
 That gap can't be too big, ( can leak later ) or too small ( pinches the
rubber water gasket ) , and hopefully the head sits parallel to the block.
( I've seen them way tilted, like 3 mm difference from one end to the other-
but that's rare I think ) 
  Had one leak recently, like after  few months - took the head off, checked
that distance, and found it to be 3.5 mm.  I measured the rubber gasket at
3.5 mm - so zero compression was happening to the rubber gasket.    
  Needs about a half  mm of compression I think.
You should check that distance. 
Very Mickey mouse design.  It is literally, and clearly, an air cooled
design 're-done' to have liquid cooling.  The basic design philosophy
....the barrels, the metal rings on top of them, the two valve head, the
ports, all that .......the ports might be bigger and double on the intakes
of course, but the basic idea dates directly from the first air cooled vw
engines in the late 40's even. 
  One guy told me how they came up with this waterboxer engine - they told
the engineers at the factory -  " You have 30 days to convert our air cooled
design to liquid cooling." !! 
So THAT explains it !!
Scott 
www.turbovans.com 

-----Original Message-----
From: Vanagon Mailing List [mailto:vanagon@gerry.vanagon.com] On Behalf Of
TC
Sent: Tuesday, November 20, 2007 5:17 PM
To: vanagon@GERRY.VANAGON.COM
Subject: Re: Head Gasket sealant sorry 1 more time

>Thanks for clearing that up for me Mark.
>Terry in Victoria BC  also straightened me out.
well so much for sealants & valves btw is Tim NOT Terry :)