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I am adjusting my valves after and engine rebore and valve grinding.
The No. 1 ex. valve adjuster is bottomed out and I have a "tight" .016 gap. Can I remove some if the adjuster cap to increase the gap?

Your valve grinding shop was suppose to grind an amount from each valve stem tip to roughly equal the amount of material removed from the face and seat. Looks like you'll need to pull the valve and make the cut.