The screw in question is pointed to. What is its purpose? It turns freely? I'm not sure if its supposed to. What setting should it be at? What does it do?

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92 300D 2.5L OM602 OBK #59

That screw is used to rotate your fuel injection pump during the timing process. Right now you have I believe it is 3 bolts that are holding the pumg tight against the block. To change the timing the 3 bolts are loosed just enough so that that screw in question can be turned to rotate the pump and when the proper timing is acchieved the 3 bolts are tightened up locking the pump in position.
You will need to consult the manual as to how the timing is done as I have an older car and do not have a manual for your year.

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84 300D, 82 Volvo 244Gl Diesel

Thanks. I understand now. Pushes the pump up or down to adjust the timing of it. Thanks.

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92 300D 2.5L OM602 OBK #59

There's also a bolt at the back of the IP that should be loosened before setting timing.

Sixto
87 300D