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I just finished installing new bearings and seals in the front end. I torqued to 15ftlbs then backed off half a flat. After checking the runout I got 12thou on the left side and 10thou on the right. I am installing new aluminium calipers from SSBC and I seem to remember from somewhere that the max runout was 5thou.
Dude, you might have hosed them bearings already. PM me with your email address and I'll send you the paper I did on the bearing change.
Once assembled you should tighten them HAND tight, then check for runout of under .002.
When I set up fronts- I grease them, install and tighten the nut while turning the wheel forward. I tighten them with a wrench to seat them.
Then I back them off,an do it again. The 3rd time is by hand until the nut just loads the bearings and then I back off to the hole. If I have to go more then a flat I face the nut face and try again. When done there should be abotu .003 endplay, should spin smooth with no binding. Then I dial in the rotors.
Keep in mind that there are 2 TWO holes in the spindle for the cotter key. If one doesn't line up you should look for the other one.
Tightening and then backing off to the nearest hole is not right. tighten by hand while spinning forward and then look if ONE of the holes aligns. Facing the nut is the next alternative. Backing off is not.
Here is an interesting article that outlines a way to set up your wheel bearings using a foot pound torque wrench for the initial bearing set and then an inch pound torque wrench for the final set up. http://www.idavette.net/hib/vette_bbfh.htm. Go to Part 12; Most Everything About 68 to 82 Brake Service. The procedure is in there. I think you would need a 0-75 inch pound dial type torque wrench to get the most accurate read. A 0-150 inch pound dial type may give an accurate enough read also.