Aha, thanks ira, I see what you're saying.

I suspect (29) refers to the o-ring that sits at the bottom of the ring nut (28) and seals the underside of the ball joint, where the wand starts. I do have this o-ring. Although it is confusingly drawn above the ball joint in the diagram, I believe this is the only way the draftsperson could draw the o-ring in the exploded view. I actually ordered a replacement (29) and looking at the size of the o-ring that was delivered by the parts supplier, it is too large to fit above the ball within the ball pan.

Well the mystery is solved now, so I thought I'd post for anybody who hits the same problem.

Disassembling the hot-water wand revealed that ECM did indeed use a thread sealant on the ring nut (28) thread. There is no gasket, o-ring or anything else that will stop the water (or steam) coming back up through that thread. Kind of a disappointing arrangement, and not very maintenance friendly (maybe I expected better given ECM's reputation). That said, the current model Technika V looks to have an improved design for the steam and hot water tap assemblies.

Anyway, I have now used teflon thread tape (folded over into a thin strip) rather than thread sealant for reassembly of both the steam and hot water wands, and it is holding fine with no leaks. It should be slightly easier to redo if I ever need to take them apart again