Keithhays,
It does not matter what side the flange is on. It can be on the wet side, or the dry side, depending on the needs of the system. The only thing that does matter, is that the gasket be on the flange side of the bulkhead, regardless of orientation.
Also, there is absolutely no point in putting any lubricant/sealant on the flange gasket. In fact this is one reason that bulkheads leak: when tightening the bulkhead, the gasket will slip out, thus undoing your efforts. Using these materials with a bulkhead make it more likely you will have to go back and do it again.
Bulkheads usually only leak due to improper installation: using lubes/sealants, over-tightening, or gasket under the nut, rather than the flange.