Originally Posted by tjohn

I'm personally a fan of the bubble method. I personally think its easier than the drip method and gives better results for me. Below is a write up that I copied from Marshall Booth over on the Mbz.org mailing list (he's a member here too, though not so active here).
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On the subject of diesel timing. If you are replacing the pump or rebuilding the engine. The simplest and most accurate way of setting the pump is: Disconnect the fuel line going into the pump from the filter. Take the spring and plunger out of #1 delivery valve, put the delivery valve back in and snug it down, hold the the pump linkage in the full open position. If you have the drip tube install it on the delivery valve, if not use the injector line in such a way that it is pointing away from the engine. It you don't mind the taste of diesel you can blow through the fuel line or use low air pressure. Put the open end of the injector line in a glass of water and watch the bubbles. Turn the engine slowly until the bubbles stop and check the timing mark. After tightening the pump recheck. This method is really more precise than it needs to be and although it may sound complicated it is very easy .