I suggest the 1/4" od tubing. That is what I had laying around
the last time I fixed an Empire sightglass. I wasn't sure it
would be ok, boiling water didn't hurt the tubing, so I gave it
a try. Just a tiny bit of a weep that didn't even drip, so that
worked.
The last time I used twisted teflon tape was on a Marklin sightglass
and that worked pretty near perfectly. I also used it as a ring on an
Elektro engine piston and valve-rod with some success. Those Elektro's
tend to have a lot of blow-by - IMHO, bad engineering, but I love 'em.
Good Luck,
Wayne