You could tweak the timing, by adjusting the rockers for the injectors. I have never past the specs, except for the fact that I adjust them to the tight side of spec. This advances the timing a little, by compressing the injector spring some more. You really need the Cat tooling to tell how far you have adjusted it.
I would recommend not pulling the #1 rockers off as all the other cylinders are "synched" with number one. When you pull the rockers you *should* reset the #1 injector timing. I really work dilagently at not removing anything from #1 unless absolutely necessary. The fuel screw is in between #1 and #2 rockers. I'll bet that if you have a 1/4 drive socket set with the rachet that the screw will go through, so you can stick an allen wrench down through it, you will be able to adjust it. If it has been a long time since anybody has set the timing, and valve lash, it should be done. The last one I did the timing was retarded from spec, due to normal wear.
As far as how far you can go? Don't ask me, I just set them to spec, I don't toy with stuff that we have to warranty. The 3100 series is not my most favorite Cat engine to work on. They have dry liners, which means bore, press out the liners, or differnt block come rebuild time. The mechanical linkages under the rockers are a pain to work with, adjust, synchronize, etc. The latest model 3126b's and C-7's I think are better. The are fully electronic have better injector sleeves. I am still having some electronic problems with the c-7 in my service truck.
This is probably way more then you wanted to know about the 3116. If I had to make a choice, I would choose a 5. 9 cummins over the 3100 engine line. The 3100 is not as responsive, hard on fuel, and in my opinion not any more reliable or longer lived then the 5. 9 cummins. The one in my company truck is 230 hp and 660 torque. It runs ok. Not going to complain.
The perkins is indeed a differnt line, anything smaller then the 3100 series is perkins, or mitsus.
Michael