Tom,
This may be off-base, but I think part of the problem might be the teflon tape you put around the tubing.
I can understand the teflon tape around the threads, as I did the same, when I replaced that tubing.
However, You shouldn't have to use anything but a "ferrell" (sp?) on the tubing and it should tighten down and seal around the tubing as you tighten the inner fitting into the fitting that goes into the block.
Here's a thought??? Are you missing the ferrell from around the tubing?