Paul, in case it helps, I've measured how far the decompressor lifts the tappet on a small Honda engine (the GXV120). It is 0.054". Your much larger engine is only lifting the tappet by 0.046". It does seem as if your decompressor pin has probably worn down a bit, but I can't believe that would stop it from working.
If you can see how much your rocker bumps with a 0.046" (or thereabouts) piece of sheet metal glued to the cam, and if it is clearly quite a bit more than it bumps when the pin runs under the tappet, we'll know the pin is deflecting under load.
