This is from a post at another Diesel site, I have an electric pump on mine so I only know about this problem from reading other post:
If there is a problem with the lift pump and you are changing it, ensure the new pump comes with instructions as to correct installation procedure if it is the newer model pump with the almost straight arm.
This info pertains to Carter #M60278 pump or new long arm style.
WARNING
This fuel pump must be installed only at the low position of actuator cam.
If the pump is installed at any other position than low cam, the pump will be ruined, the engine will stall and damage may result.
Incorrect installation will loosen the pivot pin and allows the pin and lever to come out of the pump and drop into the oil pan. This can occur immediately or after several hundred miles. This type of failure is not covered by warranty.
To ensure that the cam is at low position, it is necessary to use a mirror and a remote starter switch. Observe the cam through the mounting port and bump the engine around until a one (1) inch wide machine surface is observed. This is low position of the cam. Now complete normal fuel pump installation.