I just put my new cam chain on and am reassembling everything.  My camshaft is in the lobe down position but the horizontal lines are not quite lining up with the edge of the head.  What gives??  the cam shaft gear can only be on in one position due to the alignment dowel.  any suggestions or insight??

You will need to worry about TDCC right now. First you have to set TDCC, then turn the camshaft so the horizontal timing marks are lined up with the head. The way I did it was first set TDCC (make sure nothing rotates after this), then line up my camshaft (now the camshaft is in the proper position in relation to piston position), then put the chain and gear on the camshaft.

I was hoping someone alittle more would respond but here goes...

I recall mine not lining up exactly too.  Tried leaning up and down and went with up as it was the closer of the two.  But as I was using a used chain, that would make sense.

make sure the cam and gear interlock pin is up at 1 o'clock and that the crankshaft is still aligned with the mark in the case.  Rotate by hand to confirm.  

where is this mark on the crankshaft housing, all I see is a white blob of paint on the crankshaft, no mark on the housing

On my '88 there is a notch just inside the housing at the 3 o'clock position which I line up with a little scribe mark on the timing inspection nut on the left side of the bike.