After visiting three different color tractor dealers in town looking for one square gasket for the hydraulic filter canister and talking to the mechanics at each place I found out they all used just plain white plumbers tape. It used to be called teflon but nowadays it's called PTFE (or generically- Teflon tape) LOL!
But mechknit was right, bits of tape coming off is a bad thing in a hydraulic system. Keep it back from the first couple of threads and it's good to go. The same way I used to do it at the construction company. I guess some things don't change all that much.