Could be perhaps the timing wheel is not turning the pump? The fuel entrance valve to the pump cylinder is at the lower end in the bore. When the pump piston is pushed up it totally obstructs the fuel flow causing no output. I have heard occasional refference to timing wheel failure. Perhaps it was only that it was unable to increase the timing. I do not know.
Other than this if the piston was being pushed up it would reduce flow to some extent. Even if so worn as to not provide enough fuel compression to open the injector. I guess if there were also no seal at the top of the cylinder to the internal space in the pump the fuel would continue to flow. Unfortunatly I know little about the construction of these pumps.
I might try to see if I could stop the flow of another cylinder element. If not perhaps it is either the timing wheel or a broken crankshaft in the pump right at the front. Another senario is the cams cannot activate the pump pistons if the crankshaft is displaced in there for some reason. Keep us posted in what you find. I can easily understand the piston being stuck in the higher end of the bore. But if so there would be no flow either I think. Stuck at the bottom of the bore would mean the cam on the crank would jam and the pump not turn also I think. Or something break. As I have mentioned I have not had one of these pumps apart yet and know little. A little knowledge is a dangerous thing as well. A note to Yellit by private message might help as he has taken a pump apart in the last while. He also would be more than happy to answer any questions I think as he too is very interested in these pumps. I also think you are doing nothing wrong with the installation and attempt to time the pump.