88' 2.0 Headgasket? maybe...

[BradMph]

If you replace the bolt, probably best done cold. It may be a good idea to release all the bolts so its done evenly. Sometimes the bolts just feel weird like that also. As long as it torqued to specs you should be ok. My advise would be to go with your heart on this one.
The smoke out the pipe is probably a few things, besides the residual water, there probably oil and whatever else that found its way into the combustion chamber, pipe and cat. Keep an eye on temps and maybe your plugs to see how it's burning the fuel. If you haven't checked timing, that would be also good.
Why didn't you remove the MCA Jet valves?
As for adjusting...do what the manual tells you to do.
There are a few ways to adjust valves and the book gives it basically. With mine, I have to adjust every single valve and I do them one at a time. I will ratchet the motor around and when the rocker is in the heel center of the base circle on the cam, then I adjust that rocker.
I find center on the cam heels for each valve and adjust them individually which takes quite a while but with non hydraulic rockers, it keeps them the most quiet. The books have you adjust 4 then rotate engine 180 and do the last 4 if you have adjusters on all the vavles, but sometimes rockers are on the clearance ramps and not at their most relaxed gapping postions. You shouldn't have to worry about this though since you have a stock cam.

[ADV RIDERAA]

[QUOTE=BradMph;38373]If you replace the bolt, probably best done cold. It may be a good idea to release all the bolts so its done evenly. Sometimes the bolts just feel weird like that also. As long as it torqued to specs you should be ok. My advise would be to go with your heart on this one.
The smoke out the pipe is probably a few things, besides the residual water, there probably oil and whatever else that found its way into the combustion chamber, pipe and cat. Keep an eye on temps and maybe your plugs to see how it's burning the fuel. If you haven't checked timing, that would be also good.
Why didn't you remove the MCA Jet valves?
As for adjusting...do what the manual tells you to do.

I kept the MCA valves because they were in good shape. Put new O-rings, seals on them. I will follow manual for adj. I must say reinstalling fuel pump was a bi*** ,im sure I will have an oil leak.