Most ppl just use the kneadable art eraser plus closed cell insulation sheet approach for 24/7 use. No real need for coatings.. the eraser forms an airtight seal by itself and is easily removable in the future. You can get the kneadable eraser at Staples or any art supply store. I use super sticky black cork tape in place of the eraser but same exact procedure.
You can get pipe insulation and foam tape at Home Depot as Gray pointed out. You can just flatten a section of the pipe insulation to make small sheets for around the waterblock. Make sure you get the softer closed cell type pipe insulation. If you need any adhesive then use Rubatex or Armstrong .. get that at Home Depot.
Here's a link to a fantastic ac chiller mod and complete step by step insulation job done by Jarrow. http://forums.extremeoverclocking.com/showthread.php?t=316685&highlight=art+eraser
A folded paper towel on the back of the top video card is cheap insurance from any drips.
I have plenty of insulating materials, if you need anything just shoot me a pm.