Long story short for my 1999 Audi A4 1.8T AEB engine, my timing belt broke in Orange, TX back in 2005 on a cross country drive from Jacksonville, FL to San Diego, CA. No Audi dealer in the area so had a foreign car specialist do the work. Since then the car's acceleration has been lacking and city gas mileage has dropped off. Highway mileage hasn't lost anything.

The mechanic machined out a small runout on the head but I don't know how much he took off (I also don't know what the current head clearance is or what the spec should be). In any case, it makes sense that the reduced head clearance is affecting my timing and power.

I still need to check things like timing marks (dead on or 1/2 tooth off), current head clearance, etc. but if given the choice, is it better to install a head shim in an attempt to regain the lost power or should the camshaft gear be reset by 1 belt tooth?

AEB camshaft gears have 52 teeth meaning it's about 6.9 deg per tooth.