I may not be explaining the situation well, or else I'm extremely confused. I'll try to re-explain how I got to this point.
I first thought that I had a problem when I took off the side covers as a way to re-assure myself that I was adjusting the valves correctly (Twisted6's suggestion). My understanding is that you adjust the valves when they are closed all of the way, meaning that the lifters are at their lowest point. The manual I have says to adjust the 'first group' of valves (#1 Intake & Exhaust,#2 I,#3 E,#4 I,#5 E) when #1 is set to fire.
If I'm not mistaken #1 should be set to fire when the marks on the cam gear and the crank are lined up. When they are lined up, the lifters that should(based on info above) be adjusted are not at their lowest point. The valves that are at their lowest point are the 'second group' (#2 E, #3 I, #4 E, #5 I, #6 IE). If I turn the crank 360 degrees, the 'first group' of valves look like they are set to be adjusted (lifters at their lowest points), but the marks on the cam gear and crank aren't lined up.
If I adjust the valves the way that Larry has suggested, I agree that they will be adjusted properly. When I put the distributor in though, if I put it in to fire on #1 when the marks are lined up, it will be firing when the valves for #1 aren't completely closed. Based on what the lifters are doing, I feel like I [i]should[i] be setting it to fire on #1 when the marks are across from each other (like in the pic above).
I sent you an email LGriffin.
