check the push rod tube o-rings and the valve cover gasket to make sure they are sealing and also check the fual line from the regulator to the carb fo a nick.

Also the LS needle is an airbleed adjustment so closing it all the way richens the idle, although whay you describe is a lean condition at idle.

As for the regulator and fuel flow at idle, the regulator is not like a gate valve, it allows a little fuel to get past at idle.