I have had the diffs in and out of my D1 and D2 numerous times.
I have just used plumbers roof and gutter silicone and never had a leak.
Can get a cartridge for around $5.
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A big thank you for all the advice on this topic, I had a look at RAVE, the procedure there follows the advice, Odd as RAVE tends to complicate matters. One query, RAVE states to lubricate the oil seal lip and the running surface, the oil seal lip is the outer part? It make sense to ease fitting, but I haven't done one of these so I am just checking.
The seal on the tool. lip folding not possible.
Attachment 190837
Where the lip contacts.
The lip was folded by the axle, not the tool.
The lip can catch here, but don't overthink it. I've done a lot of this sort of thing, and the folding over thing has only happened once. It's just a PITA cos you don't expect it.
Attachment 190838
If I was doing this job I would put a big smear of grease around the seal contact area.