Use Loctite/Permatex 518 anaerobic sealer. Same stuff that comes in the Mercury Marine "Master Gasket" kit (which also includes a can of spray primer that cleans & enhances the curing of the sealer).
I was going to recommend OMC Gel Sealer but after checking part numbers found that it's been superceded. Here's the P/N description from Crowley Marine:
"0767242 - GSKTMAKR 518#37394"
Note the "518"! So it sounds like that's what you'll be getting anyway!
At any rate, you do need to carefully clean the crankcase flanges as any oil, grease, etc will prevent the stuff from curing. The anaerobic sealer only cures once it's squished.
The Mercury Master Gasket kit is a bit more $$$ but since you're having trouble with the leaking flange it might not be a bad idea to use the primer. Otherwise, I've used lacquer thinner in the past and it must be working OK 'cause have never had a leaker.
You should be able to find tubes of 518 at your local NAPA. A small tube should be plenty for sealing one block. They probably won't have the primer in stock, though. Loctite 7649 if you want to order it separately.
Found the primer cheap on eBay:
Here's a link to the Mercury Marine kit:
www.marineengine.com/newparts/part_details.php?pnum=MER++92+12564++2
BTW I squeeze out a small bead of the sealer all along the flange, then with a latex/vinyl/etc gloved finger gently spread the sealer out evenly over the flanged surface. You only need to do this on the block side or manifold side, not both. Doesn't matter which one, your preference.
HTH..............ed