I use the .305mm/.012inch feeler which puts you in the middle and have had positive results with the valves I have set. Also check your compression after setting your valve clearance hopefully it will increase and use a snap on compression tester guage as the habor freight gauges the shrader valve is in the wrong spot on the tool and gives inacuarate readings.
As for the overheating due to the valve being out of adjutment its possible:
[h=2]Valve Adjustment Symptoms[/h]
If the valve clearance is reduced beyond a reasonable amount, several unpleasant things occur. First, the valve timing is changed slightly, and this may affect performance and emission outputs. But there is an added complication: The exhaust valve stays alive because it's able to transfer a fair portion of the heat it absorbs from the combustion process directly into the cylinder head when it's resting on its seat. As clearance is reduced, the valves spend less time on their seats. This means the exhaust valves have less time to give up its heat, leading to anything from detonation, pre-ignition, and engine overheating, to a warped or burnt valve.
Finally, if the clearance is removed altogether, the valves may be held some slight distance from the valve seat, thus reducing, or even eliminating the seat-to-valve-face contact area, allowing combustion gases to leak past.
If the engine still has enough compression to start up and run, the likely scenario is an overheated exhaust valve,
Valves can lose clearance for any number of reasons. The most common is the seat recession. Seat recession occurs as the valve pounds itself into the valve seat, reducing operating clearance. The valve seat recession is most commonly a factor on very high-mileage engines.
Loose valves create less of a problem, though if they become too loose, mechanical damage between the valve stem and its adjuster may occur. Loose valves tend to make a lot of noise, they also hammer themselves and the other valve train components, accelerating wear.
Generally, loose valves occur due to normal physical wear between the components. If a valve develops a sudden affinity for large clearances, start looking for wear at the camshaft, rocker arm tip, or perhaps a collapsed or damaged pushrod.
Out-of-adjustment valves can make themselves known in a variety of ways, the most common being a distinct clatter from the valve area indicating loose valves, while tight valves may cause hard starting or a poor idle.
