Waterproofing your lights
 

I recently found out my rear blinky light, (a Blackburn Mars 3.0), is not as water resistant as I assumed. The gasket that seals up the two halves of the housing is in good shape. Is there some sort of grease I can put inside that is friendly to electronics but also water resistant? Or perhaps fenders may be a better option? I realize the placement is not friendly, as the light gets hit by all the water thrown up by the back tire.

Maybe a plastic bag and some rubber bands? Idk.

I would try something like this:
http://www.iboats.com/mall/image/view/2/3/06106_2.jpg

or just plain old Vaseline.

Silicone grease.

I think just about all greases are both water resistant and electronics friendly, it's more the mess I'd worry about. I second the Silicone grease.

Tape it?
http://static.www.odcdn.com/pictures...1093_sk_lg.jpg

I don't know about you but the Schwinn will have a Honda taillight. Wonderful rubber gaskets or silicone/rtv(?) gasket (like Mr. Gasket) sealant like you use for your engine would do?

Automotive dielectric tune-up grease. It's intended to keep moisture out of spark plug wire boots
and out of the contacts inside a distributor. Just as messy as any grease though.

A fender will work just fine, your front derailleur and bum will thank you as well. :)

After you grease the seam, fenders on front AND back......with mudguards will help keep the water, dust, and grime to a minimum.

You should lube . . i mean grease it.

my underwater camera housing calls for silicone lubricant, but just a thin coat. which means only enough so that the gasket or o-ring is not dry to the touch

for my rear plantbike superflash I use a single layer of scoth tape all around each time I ride in the rain. plus the fenders made a BIG difference! after rainy rides I always open it up and let it dry out.