I also had a problem with the hydraulic tappets. After overhauling the cylinder head, I mounted the camshaft and the hydro tappets. I measured them with the gauge and provided them with the necessary shim. (I have 6 cylinder heads and all have only one shim per valve.) I bled the hydro tappets with kerosene After screwing in the screw plug, some valves stood a little open. It had not compressed the hydro tappet, but over the rocker arm, the valve opened. Then I loosened the screw plug again and the valves were closed. Then I turned the screw plug in very slowly and stopped again and again when the resistance was felt. Now the hydraulic tappet had time to get rid of the excess petroleum. Now the valves were tight again and the compression on all cylinders was 14bar(200psi). The pressure of your engine is with 160psi very low and at the lower limit. Does the engine already have a high mileage, or is your pressure gauge defective?