The felt donut would be placed in the harmonic balancer itself on an old LA setup. That balancer has a large thin dust shield, and the donut fits inside it. Do not use the donut on a Magnum balancer.
If you place a clean, dry, one-piece Magnum gasket on the LA style oil pan you will see how much gap there is where the LA oil pan has a notch on both sides at the front. That gives you an idea how much silicone to use to fill gap. It is not as much as people make it out to be and worry about. Then, you also use a small dab or smear at the timing cover parting line at the block, just as you would on a LA gasket. I also put a small smear in the corner of the timing cover, where the loop meets the flats.
Looks like I never went back previously into this thread and added pictures.
