Well, I tried moving the chain on the cam sprocket one notch and it didn't line up exactly right, probably still a half tooth off. I checked compression on number one and it was 100. I moved it one more notch and it locked up when hand rotating clockwise to a certain point in probably about and eighth turn. I assume this is valve/piston contact.
I am backing away to think after every step. I think I will now throw in the towel and pull the balancer to check for a sheared key.
Any more suggestions are welcome and thanks to all.
'01 C Class, Six Speed
'84 Euro 240D, manual, 533K miles
'88 300E 5 Speed
'81 300D Daughter's Car
Over 800,000 miles in