Also question is, how do you adjust SBC valves?
When the exhaust valve just begins to open on the first cylinder in the firing order, adjust the intake valve by loosening the adjusting nut slightly while spinning the pushrod until you feel lash in the rocker arm. Tighten the adjusting nut until the slack is taken out of the rocker arm and pushrod.
Additionally, will a bad lifter cause a misfire?
You might have a vacuum leak around the intake to that one cylinder. If so, that can cause a random misfire. If the lobes on the camshaft are worn, that can cause a misfire and other inefficiencies as well. I would first check for a vacuum leak.
To find exact TDC, first set the dial indicator to zero at the point of highest piston travel. Next, turn the crankshaft counterclockwise about 90 degrees. Then, slowly rotate the crankshaft clockwise (the normal direction of engine rotation) until the indicator is . 030" below the TDC (zero) setting.