Originally posted by MadMax
I use the following procedure to set my valves:
With the engine cold I turn it by hand til the exhaust valve of the cylinder I'm working on starts opening, then I tightend down the inlet valve til I have no lash, then a half turn more. Then I turn the engine further by hand (always normal direction of rotation (clockwise when looking from the front at the engine) wait for the inlet valve to open and just before it's fully closed again I set the exhaust valve to zero lash plus a halfturn. And as I said, it runs perfectly for a few hundred miles. I'm going to check on different oil (same stuff a friend of mine uses in his 350 SB) Let's see how far that gets me.
But different question: You say that the lifters don't compress anymore once they're fully pumped up. Then precisely when in one valve opening cycle should the lifter begin to open the valve?
I always thought the lifter should compress fully with the valve still completely closed, then with the lifter resting on it's base the valve should open and close and only when the valve is fully closed the lifter should be let up again, sucking in oil through it's eyelet. That's what I thought a lifter cycle should be, but please correct me if I'm wrong. I took the valve setting sequence right from the CraneCams homepage. What oil do you use?
Try this procedure for your hydraulic lifters. Take 1 valve cover off. Start the engine, and get it to operating temp. they make clips that snap on the rocker to keep the oil from spraying all over. Or you can modify an old valve cover cutting access holes in it to get at the rockers. Anyway ......... once it's a operating temperature, loosen each rocker until it clicks. tighten it back down just until the click stops. Then give it an extra 1/2 turn. Do that with the rest intake and exhaust alike. Then do the other side the same way.

If I'm understanding your procedure right, you are bottoming out the lifters (Too Tight)

Also I always set the lifters when the engine is at operating temp. Not cold. Metal parts expand and contract, so you want them set at the temperature they will be operating @.