I won't venture in on the setting procedure, many others more experienced on the 'bolt that can tackle that.
A lifter full of oil may seem "solid"' depending on what you try to compress it with. It will certainly feel solid if you try to compress it by hand. If it's ingested air it will feel soft or spongy.
If you want to check it for function, you can immerse it in a cup of light oil (industry used to use kerosene), put it in an arbor press, and force the socket all the way down. This may take a couple hundred pounds, depending on the lifter, the weight of the oil in it, and particularly temperature. If the socket stays down when you release the load, the lifter is bad. A "spongy" lifter will usually emit a stream of bubbles as the air is compressed out. If the spongy lifter does not go "solid" after many full strokes, it's bad.
They are neat devices, simple in function, but intricate in design and manufacture. The inner plunger and body are class fit to a clearance of about 3 microns (125 millionths of an inch), so they are very sensitive to dirt. Be careful with them out of the engine. If you do take one apart, you cannot mix parts between assemblies.
Good luck and have fun.
