I use copper slip, tin from halfords will last a couple of lifetimes.
Take propshaft out and half pack tube from propeller end with copper slip, then slide the shaft back in, turning it as it goes in, keeping some pressure on the open end which forces the copper slip down the side of the shaft between it and the tube wall, then allow excess to push out as shaft goes right through tube. wipe off all excess copper slip and fit washers and nuts.
Haven't found that water gets into/ mixes with the copper slip, and haven't noticed any evidence of the copper slip leaking out of the tube to contaminate the water.
Shaft is free turning, so there doesn't seem to be any friction.
cheers
alan