Update...
The gasket in the picture would have overlapped with the gasket on the thermostat, so I left the "paper gasket" that came with the new housing off.
The torque for the bolts holding the thermostat housing cover on is 104 inch pound. I torqued it to 120.
It is day 2 now and no leak so far. If you do not hear from me about this issue, that means no more leaks...

Happy New Year!