How tight is correct for the timing chain?

By this I assume you had a notch ground across the cam journal oil holes. A lot of oil already goes up to the rocker shafts through the stock holes. Updating that old cam grind would have been a nice investment to take advantage of the increased head flow.

One of the best "tricks" I found regarding timing chains is to soak them on their side in fresh, warm high quality synthetic gear oil for a few days before installing them. You can tap the container a few times a day and see small bubbles coming out of the rollers as it fills them up.

I stumbled on this after running out of chainsaw bar oil one time and substituted some Redline 140w synthetic gear oil. The stuff immediately made my chains last 6 to 8 times as long, virtually eliminated chain adjustments during the life of the chains and is not that much more expensive.

I've done this on half a dozen engine builds so far, and it has pretty much eliminated any chain stretch I used to get. Buy the best timing set you can afford and soak that chain. I'll never install another chain without doing it. It just works.