Jeff, long time no talk man!
The tstat housing has a rubber O-Ring.. yes. This is required to seal the housing to the intake. Without this it will leak.. BAD. There is also a gasket between the tstat and the housing. This is not on all Bonnevilles. It has been reported that this causes a lot of 'blow-by' and provides only minimal heat in the winter. That seal should NOT look like it was forced in there. It fits nice and snug, minus the tstat. Now, I am going to bet that when you pulled the housing, the tstat was attached to the housing, right? Nice and firm, correct? And when you say it was forced in there, that when you go to put the [new] tstat back in there, it doesn't fit, correct? That'* because the tstat does NOT go on the housing. It rests in the intake. You are probably wondering how the tstat came out attached to the housing? Well, that'* a good question. Honestly I do not know. However, what I do know is that it does seal the tstat and that second gasket when the housing is placed on the intake.
Here comes the common issue on our cars. The oring you have.. is it tight on the housing? Let me guess, it isn't, right? Well, you WILL have a leak, even if you do manage to get it on there. You must replace that oring with one that fits TIGHT around the housing. Just take the housing with you to the LHS [local hardware store], and test fit the oring. Also check the diameter of it, so you can have an approximate value to look for. This is crucial to a leak free setup.. I ran into this problem, and was completely stumped for quite some time on it.
'89 SSE - GX3 -190k, 155k on body - Back for another ride.