Thermostat Housing Won't Stop Leaking

Should an O-ring seat into the groove that the thermostat sits in?
the largest OD the stat housing can receive an O-ring in. Id say just outside of the stat itself. Its odd that the stat is smaller than the housing itself, its usually a nice fit. Some stats have a rubber ring around the stat itself, or its part of the gasket set. I wonder if that's a Chevy housing as one of those is the same as Mopar Bolt spacing but uses a different stat? (Not likely as it has a receiver for the stat as GM has receiver in intake side) check this out...

"..One is the older large size with a center to center bolt pattern of 3.25 inches. This pattern was used on all v8 engines from 1951 to 1978 ... The thermostat diameter is 2.49 inches for this size housing. The other water outlet bolt pattern is 2.875 inches. This pattern was used on all slant 6 engines and the newer small block engines made after 1978. The thermostat diameter is 2.125 inches for this size housing....In addition some of the thermostats were constructed to work in conjunction with the water outlets bypass and use a different size Thermostat. Most of these thermostats are 2.55 inches..."

So maybe the stat housing you have is a generic cross-platform design that sort of fits many apps.