I know on my B230FT there is valve clearence , you cannot get the pistons to hit the valves if you tried to, if i am correct i was told not to long ago this applied to all 700 engines but dont quote me on that, thats deff something you should be looking into because you may not have any valve damage, it almost sounds like though the harmonic balancer is not seated propery or was not when installed and still isnt, it only goes on one way and once on there and timeing set you wont have any play with the harm and cam. Good Luck, i went through all this already with my 86 740ti without a problem, unfortunallt my tranny was next in line and now its sitting in my garage while i rebuild the tranny.