Sounds like you have the cam timing right but its hard to tell without being there. You line up the timing mark on the crank pulley at 0, then the cam mark (behind the gear, a line on the camshaft) should line up with a mark on the head (its sorta on the rocker arm bracket, and is straight up and down anyway). #4 should have a tad bit of slack on both valves, and #1 will have tension on one of the valves. The distributor will be pointing at the #4 contact on the cap as well. If any one of these things is a bit out of whack, you need adjust the cam timing.
My guess is you have it right, if you tied the cam gear to the chain and didn't let it slip at all on the cam gear the whole time, even if you turned the crank a little it should still be lined up. My guess is that you need to check the valve clearance. This would be especially true if you swapped cams, rockers, or anything between the heads and did not readjust the valves afterward. It sounds like you took enough precaution with the timing, but your valves are adjusted too tight and not closing all the way. A compression test will help verify what is happening as well.
After several head swaps now, I now just remove the cam and rockers when swapping the head over. Then you can drop in the cam lined up exactly with the gear wired to the chain, and bolt the rockers back on over it. You have no valves hanging down to bump the head gasket or get bent on the pistons, and it is a lot easier to turn the cam to line up with the gear.
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95 Isuzu Trooper Daily Driver
86 Isuzu Trooper reliable backup
77 LUV 2wd stock beltway blaster (resting)
79 4x4 LUV project: 2.6L, 5spd, 31s (eventually)
MEPR: Man, my 4x4 makes all other LUVs look good
