You ask about chain stretch- but I believe you are looking at the evidence of chain stretch!
Yes, it can be checked. Rotate engine around on TDC(turning it clockwise) and then see where the RHS cam is with respect to the timing mark. I bet it's way out- 10-20 degrees.
Yes, you'd be best to remove all the pieces. It could be in the cover still and lodge with sprocket-cause chain breakage- and then your in for an added valve job.
Looks like your in for a big job- read up on replacing the chain. Big job. I'd use on a wjis chain and factory guides. Replace as main guides as you can get at. FYI I've never done one on a M119 engine-yet.

M