Lapping will help, but there's a point where it won't help you anymore. I read somewhere that using anything finer than 600 grit sandpaper to sand the bottom of the block could actually hurt performance a bit.
And take your block off the CPU and shake it around a bit. If you hear any sloshing around, you probably have air bubbles.
Finally, here's a way to check to see if you're getting good block-CPU contact. Touch the block while the computer and pump are running. If the block feels warm to the touch, it's doing its job. If it feels cool, you have a problem.