Couple thoughts. I hate dead head regulators. They never seem to work perfectly and are constantly suspect. I would do as
@pishta says and run it without the cap as a test. Then, get rid of the regulator completely and run the mechanical pump straight to the carb. That pump is rated at 7psi max so your 850dp needles and seats should be able to handle it if adjusted correctly. I’d like to see a pick of what Earls filter you’re using. Most of those have very little filtering surface area and are known to be problematic at higher hp levels. Also please let us know where you are measuring the fuel pressure and what you’re using. Remember pressure is resistance to flow so when the carb is dry and the pump is filling it, theoretically you’ll have zero pressure. Unless the pump is way oversized. Although you should never be able to run the bowls dry with a properly sized pump. Lastly 3/8” line IMO is just barely adequate for 600hp. I'd consider using the 3/8” for a return and stepping up the supply to 1/2” once the rest of the system is dialed.