Jerry:
Addjust valves 5-10 thousandths loose and drive a bit, then adjust again, still loose. It will take some time to get the valves seated again, and if they are really bad, you will need to do a valve job
.
If the clearance changes with valve rotation (check to make sure you are not just screwing the cap nut!), set them at the point where you have the least clearance.
Neglected valve adjustments are hell on these engines -- allows the valve to burn, causes excessive wear, etc. I've heard of W123s going 300,000 miles without having the head removed, but also have seen valves completely shot at 60,000 from no adjustments!
Peter