So, full disclosure, I have almost no experience doing this type of work. I disassembled the engine to replace the valves (using Hayes manual) and reassembled it. We're trying to break the engine in and we're getting idling issues. It idles alright when cold, but once warmed up the rpms repeatedly drop to almost stall and then jump back up. Here's a video of the issue.

Anyone have any ideas what may be causing this problem?

 

absolutely. if you didn't have a valve job done from a shop that knows how to do them right on these heads you will have erratic vacuum as the valves aren't sealing right

the other possible is cam timing is off

take your brake bleeder or vacuum gauge, warm the car and check vacuum at idle. if the valves are leaking the gauge will flutter. if cam timing is off you'll usually have a low vacuum reading, like 14"hg

stock engines should be 20-24"hg of vacuum at idle, with NO flutter what so ever

 

compression test numbers ? both when the engine is hot+cold. did you bleed the coolant system ?