Water Heater faucent leak

Don't know how to describe the faucet at the bottom of my water heater, but it's where you drain water and sediment out of the heater. It's right above the floor, next to the heat controls.

I decided to drain sediment out of my heater. Don't know why, just heard it was a good idea. When I went to turn it off, it didn't shut off all the way. There's a small drip coming from it. I tried a plastic 3/4 inch cap, but that started to drip as well. I attempted to use both teflon tape and pipe dope. Neither sealed it.

Any ideas? Should I try a brass hose cap? I was looking at both of them in Lowe's while I stood there trying to decide with no one in sight. If I don't hear anything, I'll have to visit my local plumbing supply company but they don't have very good hours for someone who works outside of plumbing.

Thanks in advance.

Most of those things come with about the cheapest plastic valve imaginable. From what I read, some of these guys replace it with a quality valve when they first install the water heater. If you got some sediment out, there could be some caught on the washer. If so, then it would be tough to get to seal properly again. You could try letting a good flow out again, then try to close it and see what happens. Depending on how old the thing is, you could unscrew the valve and replace it now. If it is fairly old, though, it could be a bear to get out and you might create other problems. One of the pros will have some (maybe) better ideas! At least more experience with the possible fixes. I take it that it is leaking from the valve, and not the handle. You might be able to replace the washer on the thing, too.

Is the basement finished?