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Howdy all, working on a 1990-ish 2.3 Ford Lima with 90's era Esslinger aluminum head (milled an unknown amount), cam, cam pulley, etc. I got the car in December and have been working on other areas before giving the drivetrain a proper shakedown. I'm looking to replace the timing belt as it may be 20 years old with a nice sheen of oil. But I wanted a better understanding of where things are now in case something moves while I'm replacing the belt.

The cam rotates clockwise in the pic below, #1 piston is at TDC, I assume the dimples on the cam pulley and the cylinder head (red circle) would have lined up if the head had not been milled. When I rotate the crank to align the dimples the pointer was ~8* from TDC.

Question is... does the adjustment done on the cam pulley (red dash, ~8* advanced) basically zero the change caused by the milled head? Or does it add to it? I'm thinking it zeros it but wanted to be sure.

Milling retards. 8deg adv probably more than compensates for the milling.
If you zero the pulley and line up the marks, then loosen and rotate the pulley (not the cam) to pull the belt tight between the crank pulley and the cam pulley, you will be close to zero.

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LxWxHt
360LA 442E: 134.5x46x15
Lotus7:115x39x7.25
Tiger Avon:114x40x13.3-12.6
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McSorley 442:122x46x14
Collins 241:127x46x12

It sounds like I'm pretty close to zero now, thanks for clarifying. At the moment I'm also verifying the vintage programable ignition timing.