Bernie, Welcome to the 170 Assc’n Forums.
The good news is you’ve found the source/reason for the exhaust leak.
The bad news is…. if the cylinder exhaust flange is eroded…. it must be re-surfaced before the leak can be stopped. Gaskets and sealants will not stop a leak caused by eroded cylinder exhaust surfaces.
There is a history to the methods used to resurface that area on a cylinder…. Back when cylinder rebuilding was a profitable business.. cylinders were often removed and the area built-up by welding, then machined flat again. This was usually done in conjunction with grinding cyls oversize or channel-chrome/plating to renew the I.D. back to standard. These processes are not often performed since new cylinders became popularly supplied by aftermarket companies like Superior, E.C.I., and others. By the time those processes are completed the difference in price from new cylinders made complete replacement more popular. Here’s an Aviation Consumer article on the subject:
https://www.aviationconsumer.com/aircra ... -worth-it/There aren’t many folks who will do cylinder overhauls, but if you wish to pursue it you might contact Gibson or Corona:
https://gibsonaviationok.com/cylinder-overhaulor
https://www.coronaengines.com/Cylinder-OverhaulHope this helps.