It's been a while since I first posted this message. It took a while to get everything worked out but the story turns out to have a happy ending.

I decided to try to measure the gap between the pushrod cover and the side of the engine block. I cleaned everything up one more time and then got some "Silly Putty". I worked it until it was as soft as I could get it in the cold weather we're having this time of year. Then I stuck it to the inside of the cover and pressed it in place on the side of the engine block.

When I measured the flattened "Silly Putty" it was just under 3/16". This explains why the 3/32" gaskets kept failing (although I still haven't figured out how the old gasket that I took out ever worked).

I got some 1/8" thick gasket material and cut out two identical gaskets then I glued them together to make 1 quarter inch thick gasket.

That did the trick. I was able to run the engine without losing a drop of oil.