Hytran or an equivalent is what you'd use in the liftall pump now. They used engine oil because that's all there was in the 1940's. Hytran did not come along until around 1960.
Is this the engine oil pump, or the liftall pump? If you're working on the liftall pump, the gears tend to wear into the cover, causing a loss of pressure. Somewhere there's a technique for using a piece of glass and sandpaper to true up the surface of the cover, which brings the hydraulic pressure back. Since it's apart, you may as well take care of that issue.
For the engine pan gasket, sealant is up to you. Just don't glob it on there. A light smear, just enough to stick the gasket in place, is all you should need.
Be careful tightening the pan bolts, because you can actually bend the pan lip enough to cause leaks around the gasket.
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Today's Featured Article - A City Guy's First Tractor - by Fred Hambrecht. After living in apartments in Atlanta for more years than I care to remember, the wife and I decided to move to the country. Humming "Green Acres is the place for me..." we purchased a 29 acre tract about 60 miles south of Atlanta. Next came the house, I could talk about that ordeal for another two weeks... But, I want to talk about my tractor! We didn't even own a lawnmower, and all of a sudden we had enough grass to feed all the starving children of the bovine world. Naturally, I talked
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