It's not a temperature issue. There are several different PTFE tapes and they are used for specific applications. White will dissolve due to the additives used in trans fluid. You suggested replacing the o ring. With what? There are three specifications of o ring design...material (viton, nitrile, edpm, etc.) diameter and thickness. All important to whether this is a duck tape fix or something that will last. Again, the OP should seek a professional with a manual and experience not a diy fix and if it's under warranty should not attempt anything themselves.
An old saying definitely applies here, If you don't know what you're doing, don't do it.