Originally Posted by yoopone
Buy dielectric grease. You can get it at any parts store. Coat all the terminals inside the cap with the grease. Works terrific at keeping you going when things get wet.
Dielectric grease may help keep water out if applied to the seating surface between the distributor cap and distributor base but it should not be used to cover the connections inside the distributor cap. Dielectric grease (a non-conductive grease) was never intended for that use & applying it onto the contacts for the rotating rotor inside the distributior cap could just gum things up. It certainly wouldn't keep the water out.
The best thing to do when water is getting inside the distributor cap is to fix it so water can't get inside the distributor cap. The first thing to do when that happens is to simply replace the worn/loose fitting distributor cap with a new one.
First, as said in my first post above, distributor caps wear which means they get loose. That means water has an entry point up inside where the cap seats against the distributor cap seating base. Replace the cap so it isn't loose, so it seats against its base more closely.
Then if you want you can also apply some sort of additional sealant like dielectric grease or plain silicone grease between the distributor cap and its seating surface on the distributor to further guard against water gaining entry. And if you want, apply a silicone grease or dielectric grease around the inside of the ignition wiring boots. Those points aren't usually entry points for water, but the grease will make it easier to remove them the next time.