Valve Lash, please educate me

[usraptor]

Okay over my lifetime I've adjusted valves with solid lifters numerous times, but this engine has been my first experience adjusting the rocker arms on a flat tappet hydraulic cam and I need to be educated.  First of all the engine is a '70 - 440 with a 440 Source 512 stroker, Lunati 703 hydraulic cam and Lunati lifters, PRW 1.5 ratio SS roller rockers, and Promaxx (formerly Patriot) aluminum heads.  Engine has been broke in and has approximately 200 miles on it.  I tried different techniques as outlined below but can't seem to get rid of the lifter noise.  So today I decided to adjust the valves again.  FYI, engine has not been run in about a week and was cold.  I use the normal Chrysler valve adjustment chart sequence.  The instructions with the rocker arms  say that the rocker arms should be set with 0 lash and this is where my question comes in. 

At what point do I have 0 lash?  With a solid lifter cam it is pretty obvious what is 0 lash.  However, with this hydraulic I seem to have two options.  I can either turn down the adjusting nut until the rocker adjusting cup is tight against the pushrod and roller tip is tight against the top of the valve stem.  When adjusted like this the push rod spins fairly easily between my fingers.  So is this considered 0 lash?  The reason I ask is that if I put pressure on the pushrod side of the rocker it will depress the lifter slightly thus creating a gap between the top of the valve and the roller. 

The other option is to tighten the adjusting nut/cup until there is no more gap between the roller and top of the valve when I push on the pushrod side of the rocker arm.  At this point I can still spin the push rod but just barely.

So which option is considered 0 lash for a hydraulic cam?   

Lastly, I've read about lifter pre-load but I'm not exactly sure what is considered pre-load.
Is pre-load when you adjust the rocker arm adjusting nut/cup down until the there is no gap between the roller and top of the valve stem when the push rod side of the rocker is pushed down or is it something else? 

Since the engine has been run and is not a new build I would assume that the lifters are sufficiently pumped up with oil however, before this valve adjustment when I first started the engine, after it had sat for a week or so,  it would take 3-5 seconds for the valve clatter to go away.  I'm not sure if this is the result of lifter bleed down or the loose adjustment on the rocker arms.  Once the engine had been started any subsequent starts that same day did not produce any lifter clatter.

So for those engine builders out there, please educate me. 

[1 Wild R/T]

You want to set lash initially to the first point...       " I can either turn down the adjusting nut until the rocker adjusting cup is tight against the pushrod and roller tip is tight against the top of the valve stem. "    Then you want to add preload....  Preload is the amount you compress the lifter beyond zero lash....  Typically an additional 3/4 of a turn of the adjusting gives you a quiet running engine....

[usraptor]

1 Wild R/T thanks again for the help.    That makes perfect sense.