I Googled some sites and all of them warn you to NOT use Teflon tape that comes in contact with gasoline. So scratch my idea.
(
But in my defense, if it's only around the lid of the gas cap or somewhere else you can easily get to, then why NOT use Teflon tape? Even if does start to get spongy when in touch with gasoline, you have all the time and access you need to simply wipe it dry and retape it. Just as long as it doesn't quickly dissolve into a goopy mess that drips into your tank. But if you're one of those people who want it to be done right and stay right the very first time then steer away and use something else.)
Some sites mention other kinds of tape you CAN use in the presence of gasoline but of course none of them remembered the name of those products. It was said that you can find them at home supply stores.
So far, cheese cloth sounds really great!!