Another problem may be the orifice in the reg being too small (my money would be on that). Considering you've put a 500 hp pump on a 2L engine I wouldn't be surprised. The 'pulsing' behaviour you're describing would suggest that to me. There are two options to consider-
1. Fit a second reg of the same type to the rail.
2. Fit a reg off a larger engine (it will have a bigger orifice)