you could try teflon TFE paste if the tape still allows leaks... it's what I started using recently. Resistant to 3000 psi at up to +400 deg Farenheit for gasses, lubricates and fills the threads completely...
seals unconditionally...
only a couple of bucks at the hardware store...
and it's harder to lose than the little roll of teflon tape
I was on my 4th roll when I bought this stuff... they kept running away from home.. but be careful, it looks a lot like a tube of toothpaste.
---edit---
Tanky, remember that 12 psi is only an approximation on that regulator... it's an industrial one so you are guessing pressures in between marks... I'd try it out on an old model or some scrap plastic first and see, it might be adequate for ya... try thinning 2:1 ands see how it sprays, maybe go closer to 1:1 if it sputters on ya...
save your money and later you can get an industrial compressor for $69 at Walmart... it'll go as high as you wanna pretty much, but for now I'll bet ya this one can still service ya...