[otto in norway]

Seems to me that you are not quite right... It is pretty well explained in Waynes book. Looks like you got it misunderstood. You should have 1 mm overlap at the #4 cylinder when you have TDC for #1. TDC is the compression cycle and this means that the valve is supposed to be firmly shut on that cylinder. But the opposite cylinder is just finished exhaling th exhaust and beginning to open the intake valve at this point.
But don't freak out yet. Your distributor will determine which of the cylinders are at TDC. If you point the distributor "hand" towards cylinder #4 when you have a 1mm overlap on cylinder #1, you have set it correctly. This position is now TDC for #4. Turn it 360 degrees, and the distributor hand will point to #1. Meaning TDC for #1. Then you should have 1mm overlap on #4.

Hope that explains it...