Greg, the washers are copper. The kits I have are identical to OEM Ford and run $12.50 shipping included. The resto suppliers get $20 for the same kit. I have been told that stainless fasteners are a little too soft to use in this application. I had thought about stainless too but went with the original
zinc plated steel nuts because they hold better. You certainly don't want any of them loosening up on you. Ford used thick copper washers as "gaskets" to prevent leaking around the bolts. Many guys either don't use any washer or substitute a regular flat washer. The copper washers are soft enough to dig in and form a seal.
By the way, come to think of it, I bet my posi is a torque lok too, just because of the price I paid Clayton. Whatever, it's a really good unit, I like it and I thought the price was more than fair for what I received. I thought I originally had an open carrier but when I pulled it out to replace it I found that it was a torque lok with completely shot clutches.