Z Offset confused

I have a non servo set-up for the Z probe (swinging arm JHead) and am a bit confused about setting up the Z offset. I have found instructions for using GCode thanks to Madmike;
Z Offset
Lower the nozzle till it just touches the glass. Raise it .1 or until a piece of paper just slides under it.
Set Z to 0 using M555 Z0
Lower the Z axis testing the Z Endstop after each step for triggered using M119
After it triggers use M114 to get the location of the Z axis
Set the Z offset with M555 Zx where x was the number listed for Z with the M114 command
i.e. M555 Z15.5
Use M500 to store the value on the EEPROM.

However when I start a sample print the Z probe is hard against the switch. The Z position has not changed from when the switch closed.
Should I have entered a value into the Marlin - Configuration.h as well or do I need to add something to Slic3 to make the probe lift before printing?

Further investigation has revealed that #define EEPROM_SETTINGS is ON but when I use M501 to see stored settings, Z is 0. The offset has not been stored. I have tried M555 Z5.00 followed by M500 as a test but M501 still shows Z0. Any suggestions?

Edited 1 time(s). Last edit at 07/26/2014 05:16AM by gimli1003.

The value should be a positive value on that M555 comand. After homing the Z it should read zero. If you move the z up until you can put in a piece of paper, take note of how much you moved up and this is your Z offset.

And also check if EEPROM is enabled in the firmware when you use this method

#define EEPROM_SETTINGS

if that line is commented out then M555 will not be storing the settings