Correct it should be dry.
I beleive there are two styles of PV gasket. One better matches PV's with rectangular holes, the other with round holes.
Commonly the PV gaskets split when removed, but I don't think this is any of it.
.040 is a lot of T-slot exposure, especially on a newer holley.
Which List number is this?
If you can take a picture of the block.
I'm not ready to blame carb....yet...