Well I've removed the cam from the engine block and removed the cam gear - again! There are no discernible differences between the old and replacement camshafts that would create this problem.
From the service manual:
"End play of the camshaft is determined by running clearance between the rear face of the camshaft gear and the
thrust plate. The standard clearance is .004" to .007" as measured by a dial indicator. Should a check show too little end play, place a shim of suitable thickness between the camshaft shoulder and the spacer. Too much end play may be corrected by removing shims of dressing off the spacer a slight amount. "
The picture below shows my installed camshaft with the spacer in place. The spacer is exactly .006 thicker than the thrust plate. When the gear is installed to let's say .007 running clearance (again between the hub and the thrust plate) then the hub would be .001 off the spacer. So the most the shaft could move rearward for end play would be .001.
So perhaps I am misunderstanding how one would use a dial gauge to measure the end play. .007 end play as defined would mean a reading of .001 on the dial gauge. .006 end play would show 0 on a dial gauge because the thrust plate prevents any forward movement and with the hub up against the spacer there would be no rearward movement either - so what use is the dial gauge.
I'm guessing this -when they are describing this "end play" running clearance, it doesn't really mean the distance that the cam can travel back and forth but instead, as described above the clearance between the hub and the thrust plate. I think this is where I'm having my problem - I'm thinking camshaft travel and that is incorrect. This is really about the thickness of the spacer and that thickness relative to the thickness of the thrust plate.
Having thought about this so much I think I now understand what this is about - you don't want that rotating hub rubbing against the fixed thrust plate but instead to rotate against the spacer which is not fixed and can spin on the shaft. So given that the difference between my thrust plate and spacer is .006, that means that I should have no more than .001 travel as measured by a dial indicator. I would think that you also don't want that hub to be up too tightly against the spacer creating friction but than again maybe the friction would likely cure that pretty quickly- (or create a catastrophic failure for all I know

) Of course, the question arises - the bolt should be torqued to 35 fp - what if it only take 20 fp to move the gear?
If I'm correct - the starting point of this procedure should say - use a caliper to determine the difference between the thickness of the thrust plate and the spacer, this sets the minimum running clearance you have-less than .004 than add shims, more than 007 then dress the spacer.
At this point, I think I should install the gear until I get a dial indicator reading of .001 putting me at the max end of the end play / running clearance. So my process should be to set up the dial indicator as I install the hub, checking end play travel until I get to .001. I do find it interesting though that when installed the cam gear hub is not fully on the shaft as shown in my picture in the prior post.
I appreciate any advice on my missive - i really don't want to install / remove the camshaft and camshaft gear for the 5th time. It's a pain because I can't remove the gear with the camshaft installed because I've found no puller with arms that can properly grab the hub in such a way to not shatter the gear with the cam in place. And I'm using up all my assembly lube!.