Paul:
That's similar - the stuff I used to see in boats was like a foam-rubber rope (came on a roll) with Stickum imregnated in it.
OK, so I just called Nick at Jamestown Distributors and he tels me (It was good to hear a Rhode Island accent again) that they don't stock "Rubber Oakum" rope any more, as nobody was buying it. Everyone has gone to - and Nick recommends - this stuff as a caulk replacement for sticky Oakum:
http://www.jamestowndistributors.com/userportal/show_product.do?pid=2005&familyName=3M+4000+UV+Marine+Fast+Cure+Sealant+
He says just shoot it up in there, smear it around with a paint stirring stick, let it set up over night and it shouldn't leak a drop if you fill the area you suspect. Avoid getting much on you, as it's a pain to remove from your skin. It has a good amount of stretch, so it should give with the slight movement of the transmission nose, although it may transmit a slight bit of transmission noise to the frame, but the tranny is mounted with even stiffer rubber, so I don't see that as an issue.
West Marine can get pretty much any 3-M product, or you can order on-line from Jamestown Distributors in Rhode Island.
Not affiliated with J-D, other than dropping a LOT of money with them on my boats over the years.
gn