Never mind the O rings, if you put enough air on it the leaks won’t matter! Remember they will more clearance on a job like this too.
I think graphited yarn is to make you feel like you have tried rather than to actually acheive much. Bit like the Dunstall muffler on my old Triumph, you were supposed to wrap the inner perforated tube with fibrelass to absorb the sound, but whenever I checked there was never any in there. Didn’t take long after repacking for the crackle to come back in the exhaust either.
I saw an interesting variation on the oscillating idea this weekend, a little three cylinder radial, with fixed cylinders, and little valves pivoted at much the same place as the cylinder would have been, and using a fork onto the crankpin to operate them. Gives the same sort of timing. Downside is the steam (and exhaust ) connections have to be flexible, since the connection is directly onto the moving part of the valve. With a bit of ingenuity I’m sure that expedient could be avoided.
regards
John