I find that teflon paste works better than teflon tape. You can find it in any hardware store with plumbing supplies.
If you have a fitting that is not compatible with the threads you are trying to install it into, it will not seal, no matter what goop or tape you try. I suspect that the fitting is incorrect. Have a close look.
Also make sure you get the right oil in it. 10W/40 is definitely too heavy. This engine just isn't made for it.
