How to seal valve cover bolts on 4.9L?

The dried up material you found is probably the remains of the rubber from the original bonded washers, over time the combination of oil and heat degrades them. Sometimes called Dowty seals as that's who first made them, they are a washer with rubber bonded to the internal diameter and a couple of millimetres onto each washer face.
Cheap as chips (OK French fries) if bought from an engineering supplier or the internet.

 

Stat-O-Seals

 

Check the surfaces on the valve covers where these washers will be sealing. Mine needed to be dressed in order to have a better chance at sealing. Those ignition wire brackets can be a nuisance as they can create torque on the nuts. Hopefully you have the the female/male standoffs that help with this somewhat?

Don't expect perfection either. The valve cover gaskets are another source of leakage. Don't use silicone. I've done pretty well with just the gaskets and some Dow Corning 111 silicone grease. Just tighten them evenly and not too much. Once again don't expect long term perfection. Check that your sealing surfaces are good and that the valve covers aren't a bit warped. MIne were.

Remember this though, leaking oil, on a small scale at least, is part of the Italian car continuous flow undercoating technique.

 

This method has always worked for me.

1. First clean all areas, I use acetone.
2. Toss the rubber insert washers.
3. Go to hardware store and get small American standard flat washers that fit very snug.
4. I then use a red anaerobic loctite product under the washer and over the top of the washer.
5. Install the cam cover nut and torque to spec.
6. After 50 to 100 miles you may have one or two seepers, in that case repeat the process with those only.

This method has never failed me and produces cam covers so dry they become dusty.
Ciao,
FGM
Image Unavailable, Please Login

 

Don't forget the US washers they fit tighter on the stud. The rubber bonded washers have way too much play and are IMHO "junk"
FGM

 

I've also done thicker nylon washers with Loctite 515 or the equivalent and that worked for a while but the nylon eventually warps.

Honestly, dressing the recesses where the washers sit on top of the heads makes for a much better shot at getting a seal that lasts longer. But they do tend to rotate after a while and then the Loctite is useless.

It's a maintenance item ...

 

Frank, I'm seeing quite a few rusty items in that engine compartment ...

Maybe a bit of the Italian continuous flow lubrication system might be wise idea ??? LOL.

My Espada has an almost unfettered crankcase vent hose that's over an inch in ID. It wraps around the right front of the engine and drops down in the front of the RF wheel well.

That side has about 1/2" of a dirt/oil coating on a lot of stuff but ZERO RUST!

Looks like hell though ...

 

Or you could try the correct size of bonded washer and know you are using a proven, tried and tested engineering solution that works well if assembled correctly
Hope you get it sorted Art whatever solution you use.
Chad