I just worked on my exhaust manifold on my 340. I just put a new stop on it and the heat riser coil therm. is against the pin and has tension on it. When I put heat to the coil therm. it coil's up and has no tension on it and the flap in the manifold turns freely . Is that how it works or should the coil therm. spring be hooked on the pin instead of against the pin. I don't want to put it on the car only to find out it isn't working right.

The end of the spring should hook on the pin. What you want is as the spring heats up it opens the flap and if the spring is cold the flap is shut directing the exhaust heat thru the intake and out the other side.

Does the spring unhook when it is heated up?

sounds like it needs to be wound one more turn, otherwise..left alone it will "clatter" when engine is idleing....