heres how I insulated my cpu.
1)put dielectric grease in the pinholes of the socket (VASELINE)
2)dielectric grease (vaseline) on the bridges.
3) 1/4 thick foam of back of MB ~4"x4"
4) silicon in the empty space in socket (don't make it too high)
5) place the cpu in prepared socket.
6) silicon around the socket and zif bar.
7) silver paste on cpu core
8) place temp probe now if you have one.
9) make a platform of silicon for the WB to contact on mb around the cpu.
10) tighten down waterblock, silicon around edges up to makerblock level.
11) after 24hrs or more, use great stuff expanding foam around water block. If you haven't siliconed a barrier around the waterblock, the foam will creep under and lift the waterblock off the core(BAD).
look here
www.overclock-supercool.com