I'm verifying TDC on my fully assembled and running 340. I tightened the piston stop to touch the #1 piston at 10* BTDC (on the balancer), then rotated the crank counter clockwise until the piston touched the stop (which is about 10* ATDC).

Is the middle true TDC, or does there need to be some sort of adjustment applied for slack in the timing chain?

How much slack does there need to be to make a significant difference???

What is typical, 1*? 2*?

Timing chain slop is not a factor in determining tdc.

Sounds like you got it right. If you touch the same # of degrees near TDC on both rotations, the true TDC is in between.
Even if you got 15 degrees on one spin, then 11 on the other, you'd now find TDC to be at 13 degrees because you add the numbers and divide by 2.
In your case, 10 and 10 still results in 10.

With the stop set at 10 BTDC then if it stopped in the other direction at 14 ATDC you'd paint a new slit line 2 degrees to the right (clockwise) from the original slit. As said timing slop is not a factor in this particular check as the slack (however much or little) is being tightened up both ways so it's in effect being negated. However timing slop is a seperate (but serious) issue from measureing actual TDC & 4 deg of it is like retarding your cam from 106 to 110

Are you sure it of the cam degree? Can't remember which way it goes but Cam is half speed of crank.

timing chain slop and cam phasing are both measured in crank degrees (on the dampener) so 4 deg of slop would mean the cam could retard as much as 4 deg as the chain/gears occillate back & forth in operation. The cam itself would only actually be retarded 2 deg which shows up as 4 deg on the dampener & with phasing being measured in crank degrees so you go by the dampener distance/degree wheel which'd be 4 when referring to cam phasing (adv/ret)