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Sorry, but the right valve adjustment spec for D-cam Volvos is .015" hot (roughly .017" cold).
Compression tests aren't more than rough indicators of what's going on, but those numbers are really low. D-jet is very picky about the condition of the engine. If your motor is as worn as those numbers indicate, there is no point trying to tune anything. Rebuild what's wrong.
A leak down test will do a lot more to tell you where the problem with the motor lies than a compression test will. Have one done before you spend more money or time.
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