I cleaned the area for it to be smooth, I used a gasket, and tightened nice and tight. I used the black sealant paste, and its leaking...

what should I do..

 

do it again

 

.

 

You should have used the high temp redish orange gasket sealer on both the housing and cover. Spread it thick enough not to see the shinny metal. Give it about 10 minutes to skin over, then put the gasket on the cover and 2 top/side bolts to get started. Then bolt it all up. Wait until the next day to fill it up. Then test drive it. Always seems to work for me.I like the redish orange high temp sealer, because it is rubbery, and doesn't setup to a hard candy.

 

Black RTV is also rubbery...

 

do it again without the gasket, just sealant. give it time to set up before filling the fluid.

 

It seems previously the foam was used. Is that a better alternative?

 

Probably no way to patch it.. i'd drain it and do it over. The surfaces need to be CLEAN and DRY.. NO Residue. Use acetone or laquer thinner and wipe dry with clean rag. Here's the stuff I like.

Permatex 81182 Gear Oil RTV Sealant
I get it at Napa for a couple dollars more than the red, blue, black, or polka dot stuff that may or may not work the first time

I put it on the diff housing first and while it sat there 'skinning over' I put some on both sides of the gasket, and stuck it to the cover. About 5 minutes later I bolted the cover on. Let it set up overnight, then refill.

 

Over night is best but I've had luck with 10-12hrs in a pinch. Never less

 

Wow, I must be blessed... I don't use a gasket, just RTV.
Remove old cover and drain old oil
Clean diff and cover surface with a wire wheel, gently to not cause any grooving or scoring of the surfaces
Run a 1/4-3/8 bead of black RTV around the cover and once around each hole,
Wait 15 mins for it to "set up" a bit,
Put the top bolt in and alternate gently tightening each bolt in a criss cross pattern like doing lug nuts,
Go over the bolts a second time with more torque
Let set for another 15 minutes,
Add fluids

I've never had a leak.

 

Lubelocker!!

 

X2 with the Permatex. It's totally different than anything silicone based. My mechanic (only person I let work on my XJ besides myself) has been drag racing muscle cars for 25 years and has built countless rear ends, he says it's all he uses, never had an issue with it.