plowboy2 -
All 261's have solid lifters, but the 58-62 block is drilled for hydraulic lifters. You can set them cold, but of course you will need to set them again after the engine is hot.
Cold settings = intake: .010 exhaust: .012
Hot settings = intake: .008 exhaust: .010
The 62 - 261 is a full presure engine so you will have to set up the engine with a full pressure (modern day) oil filter. It can be located anywhere, but keep in mind that most likely you will have to use a spin-on filter with a spin-on base. It may not be that attractive to mount it where it can be easily seen.
I'd like to here more about your T-5 installation and how you won the battle of the location of your shifter. It must have gotten pretty close to the seat in a 36 cab, assuming you used the S-10 T-5. With a tail shifter, it might have worked out OK.
Good luck!
Joe
