After putty dries you aren't supposed to be able to soften it. If you want to see something hard, try some Milliput sometime. It is epoxy putty and once it dries it is hard as concrete.
Try Matt's method, as beSeen mentioned, at this link:
http://www.swannysmodels.com/Seams.html
Use pieces of masking tape along the edges of the area to be puttied. Once the putty is in place, immediately smooth it down with a Q-Tip moistened with acetone. Let it dry and then sand smooth.