The bottom line question is this:

Can I use a silicon sealant, like Dow 732, to seal a propane regulator
fitting?

http://www.mcmaster.com/#dow-corning...alants/=i140zh

If not, is there something else that will solve the following problem:

The O-ring on the regulator of my gas grill has gone bad (again). This
is the O-ring that should seal the nipple where it screws into the
regulator itself, having nothing to do with the QCC-1 connection to
the tank. In other words, there is no (or shouldn't be any) movement
at that connection.

I was able to find a replacement O-ring at a mom-and-pop hardware
store few years ago, but I tried a number of different sizes from the
same source last week and I can't get it to seal anymore. I guess
there won't be a $0.50 fix this time.

Yesterday, I bought a replacement regulator and hose from Home Depot
(Brinkman, $17) and it fits fine. However, it leaks at same spot -
where the nipple screws into the regulator. I tried tightening the
nipple with a deep socket over the valve inside the QCC-1 connector
but it didn't budge. It does not appear that there is an O-ring on
this unit like there is on the original.

I plan to exchange the item today on the hopes that the one I have is
defective, but if the replacement leaks also I'm thinking of trying
some silicone sealant at the nipple/regulator junction.

I wouldn't unscrew the nipple...I'd just spread some sealant around
the threads where they enter the regulator.

What I don't know if whether silicon is "propane-proof" or will the
propane eat through the silicon.

Your thoughts? Thanks.