Overdrive solenoid leaking

[Automotive Stud]

I've got a '50 merc overdrive, the solenoid always drips where it meets the transmission. The solenoid is NOS, I've tried adding a paper gasket between the flange but that didn't really do anything. I also tried adding an o ring between the solenoid and the transmission, but that just made it stick in overdrive sometimes, I guess it's binding on the shaft so it won't release. Also it looks like it's still dripping. Any way to seal this thing up for good?