Well my suspicions were confirmed. The teeth on the bottom of the timing belt (6-8 of them) were all shredded off. So I'm doing the belt, idler, idler spring, water pump (which is hard to find the right one with the lip for the belt cover up here), crank seal, cam seal, and valve cover gasket, as well as doing a bit of a tune to it.
Question I have is that I'm resetting the timing, but just want to make sure that when No1 is at TDC, and the cam timing mark is aligned which intake and exhaust should be open. I know the dots are all ligned up, but rater get it right once, than have to open the whole thing again!