The elevation knob is two halves, but they should be screwed together with a set screw. Flip the aperture to the rear, and you should see a hole in front of the aperture. Set the dial at the 8/3 setting, and the holes should line up. Do you see the set screw? I believe the hex wrench needed is 1/32".
Now to adjust the sights (my slightly modified Santose method):
[Note here that A2 sights are actually set up for a 20" barrel shooting M855. The sights won't be *perfect* for a 16" barrel regardless, but they'll be very close, and plenty good ENOUGH.)
Click the bottom wheel all the way down, until it bottoms out, then click it up three (3) clicks. With the top wheel at 8/3, tighten the set screw. The halves should now move as one unit.
Now, the 8/3 marking means that the rear sight is in the 300m setting when cranked down (where it is), or if you crank up one full rotation, it's at the 800m setting. You should see other markings, 4-7, along the wheel as you turn it. Those, of course, corrospond to 400, 500, 600, and 700m settings.
How to zero:
Remember, you can crank the wheel down 3 clicks BELOW the 8/3 setting, due to the way we set up your sight. So, click it down two (2) clicks, to the 8/3 -2 position, and sight in at 50 YARDS, adjusting elevation at the front sight only. You are now zeroed, more accuratly than with the GI method. If you crank back up to 8/3, you have the standard USGI battle zero, and should shoot to point of aim at 300m. If you want to shoot farther, say at 500m, click your wheel to 5, and you're good to go. The wheel is now calibarated.
However, most of us agree that the USGI 300m zero isn't all that great for most work, as there is too much arc, and at ranges less than 300m, you'll almost always be very high.
So, click back down to 8/3 -2, and you get a very flat trajectory that is within 2" of the line of sight from 20m out to 250m. It will cross line of sight at 50m on the way up, and again at 200m (220 yards) on the way down. This is the setting that most of us leave our rifles in.
Now, why then, did I suggest setting the wheel so it will crank down to 8/3 -3 instead of 8/3 -2? Because you'll probably spend a fair amount of time at a range shooting at 100 yards, and you'll be just about right at 100 yards with your sights set at 8/3 -3. At anything less, you'll shoot high at 100 yards.
Hope that helps...