I am not sure about the E320 engine, but on the e300D engine I had to remove the timing mark. It might be worth a subscription to alldatadiy.com for an exploded parts description.

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Dennis
2006 E320 CDI Black/Black Leather. Nav, HTD Seats HK stereo 32000 miles.
2000 VW Passat 1.8t 300,000 miles as of Dec 09, 2009 original owner
1997 E300d Silver 300,000 miles As of Jan 05, 2010
3rd owner SOLD