I set the tappets at the recommended 2 thou. My manual says 2 thou. cold or 4 thou. hot for both inlet and exhaust. Seems awfully close, but the gap impacts valve timing as the bike seems to start easier with the close gaps.
I set the timing static on full advance with a degree wheel attached to the crank by a pair of puck magnets. I use 40 degrees BTC (or as close as I can get it, the spec is 43 degrees) for full advance ignition timing, using a strip of cigarette paper in the points as a tension feeler (I set the timing just as the paper begins to pull out with a gentle tension). Note that the 4 thou. point gap is to be measured at TDC, not maximum. I find it easier to use 12 thou. at maximum opening instead, because it's easier to find max opening for routine tuneups rather than fiddling around with trying to find TDC. They work out pretty close anyway.
When I got the bike, it had been set up according to Mk 3 specs, and was difficult to start. Now, on those rare occasions that the crank is not twisted, it starts in the first three kicks, often first or second.
I have been looking for a crank to set up correctly (not with a temporary bodge, as Doug so accurately suggested), so if there is one available, I'd love to see pics and determine if it is serviceable. Right now our riding season is rapidly passing, so I am just keen to get back on the road, even if it means welding my old crank as a temporary fix.