I need to replace my lower oil pan and after reading all the threads here I think RTV grey is going to be my best choice for sealant. The instructions on the RTV grey say to tighten until the RTV starts to squeeze out, then wait one hour and tighten another half turn. It looks like the factory service manual has you just tighten them up right away to 55-56 in/lbs. What is the best method?

 

i just did this a few months ago and i used RTV and here is the trick:

1. put that rtv on the new pan.
2. gently place it up to engine
3. gently by hand tighten the bolts HALF WAY(just enough to start pressing the RTV to the engine, and stop) this allows the RTV to dry well and form a more even rubbery seal, and wont drip into your oil pan possibly getting sucked into the system.
4. let dry for 30-60mins.
5. after then come back and bolt the bolts in a crisscross pattern
6. wait 12 hours before refilling up with oil

the FSM expects you to use a thinner line of RTV product than you can actually use in real life.
at the factory i think a robot precisely squeezes a thin line around and its perfect once tightened.
PLUS: the engine at the factory isnt placed into use right away. the company who makes RTV expect you to want to fire up and use the engine with in 12hours and covers their ***
and i used this stuff:

 

i've used gray rtv numerous times. Make sure the surface is clean of oil and debris before applying the rtv. once rtv is applied to the oil pan, attach it to the upper oil pan with a few bolts, hand tighten slightly just until you see rtv start to push out. Stop. I usually wait 1-2 hours (depending on the temp and humidity), then come back and tighten the bolts. I usually wait another 1/2 hour before filling new oil.