Valve timing - how precise should it be?
 

I am having problems with a single cylinder bike engine that I rebuilt. The mark on the cam will not line up when crank is at TDC. it isn't a lot out, and moving a tooth makes it a lot worse.. how critical is this? I havent measured it but i would guess it is a degree or 2 out. I am guessing someone skimmed the head previously or something and it isn't a big deal but would like conformation from somebody who knows!

As much as two degrees could too much

setting your timing this way is not the best way to set it up but if your not to worried about loosing a couple of hp then it will be fine if you are i would suggest you take it to someone who can degree the cam in.

You are unclear as to what you are trying to line up. The camshaft would not normally line up with it's highest point to the Crankshafts TDC. The inlet and outlet valves would open a little before and a little after TDC. On a high performance engine this would be critical and but on a low performance single cylinder motor a degree or two is not going to be important. The important points are the shoulders of the camshaft when the valve is just starting to open this can be before TDC even on the exhaust cycle.

Make sure your cam chain has tension on it before worrying too much about marks lining up. Had the same problem with a Kawasaki Z250 years ago. I ended up turning the crankshaft backwards a bit, maybe 10 degrees, then forwards to line up the TDC mark again. found this put tension on cam chain, and ensured the cam was right.