Your response was spot on, as I was figuring out the husher issue just as it was posted!

I think I have this figured out, here was the deal:

As originally mentioned, the car suffered from a rough idle since a rebuilt. It was thought that overly tight shim clearances could be a cause. My theory was that a valve grind combined with new seats may have allowed the valves to travel up further and eliminate clearances than may have been there prior to the rebuild.

When I went to measure the gaps originally, I encountered the grey area of pushdown on the tappets where they would allow me to get feelers in there, but there was more resistance than I was used to. Rather than realizing the hushers were responsible for this, I thought my original theory was correct and put the thinnest washers I had to see if it made a difference. I removed all the 3.97mm original washers and put in 3.30 to 3.35mm washers. When I went to measure the gaps afterwards, it was the same problem, my feeler was encountering the resistance of the tappets and I thought I needed even more gap.

I started and ran the car with these thinner washers and the valve train made an absolute racket. Not sure why was, after disassembly, nothing appeared out of place. However, when I took everything back apart the second time, I remembered the husher issue and pulled off all the tappets to reveal them. I removed the hushers and remeasured with my thin washers still installed. Now I had gaps of nearly 0.850 mm (.035")!!

So I remeasured everything a third time and computed the washers I would need to bring the gaps into spec. That's when I installed mostly 3.75mm to 3.80mm washers. This brought my gaps back to 0.375mm (0.015"). After this the car ran great and the valve noise was gone.

So my conclusion is that it was a compound problem. Originally, my 3.97mm washers were too thick, but then I made the problem worse by mismeasuring and putting in washers that were way too thin. After figuring this out, I was able to find a good middle ground without the hushers messing up my measurement, and everything appears to be back in spec.

What a learning experience! So many years with Volvos, and I had never done a valve adjustment on a B21 until now!