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Mike, yes, shellac is basically the same stuff used to "varnish" wood, except the auto-sealer grade is likely not as high a quality as the cans of shellac sold for finishing wood. "Varnish" is not actually shellac, it is chemically something else, but it is used to finsish wood also. Shellac actually comes from a bug and is dissolved in methanol... but I'm digressing here. Shellac was used to seal some engine components but not used much today since the invention of silicone sealers and the like that works for more applications, and far more forgiving than the 'ol shellac. You can still buy shellac gasket sealer in auto parts stores, in the USA I think it is usually found under the Indian Head name brand. It's red, some old timers still swear by the stuff. I don't know about the TVO engine, but what you describe sounds identical to the TO20/30 Continental engine rear crankshaft cap installation. There is packing cord that gets jammed down each side of the cap after it is installed to insure no oil leaks through to the backside of the engine. If that's what your doing, you can use just about any modern gasket maker goop from an auto parts store. The gasket goop is quite thick, so rather than soak it, just smear a LIGHT coating on the outside of the packing as you jam it down into the groove.
As far as the seal itself, the origials may have been leather, may have had a felt dust cover also, but all the seals now days are made out of neoprene rubber. If you install the seal backwards it may fit, but will also leak. The feathered edge of the rubber seal goes against the crankshaft.
Hope that helps! George
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