From memory, I think the rail only fits properly one way, if not, I think you are correct that the elongated hole is the lower one. It's been almost a year since I did this but I do understand what you mean!
About the timing. If your chain is not new, you'll never get them both at TDC. The tensioner doesn't matter, it is on the "slack" side of the sprockets. Crank until the cam tower marks are lined up perfectly then read the number off the crank. Repeat several times so you know your reading is accurate. Mine is 4 degrees ATDC, which means my timing chain is stretched 4 degrees and needs replacement (I'm changing it in the next week or two.) Sounds like you have the same problem.
Here's some light reading for you:
http://www.meimann.com/docs/mercedes/OM60x_Timing_Chain.pdf
Notice that the TDC pointer is adjustable over a 3 degree range! I set mine with a dial gauge while the head was off, measuring off the piston crown. My indicator was off 1 degree, now it's fixed. After you get the head on, also check the IP timing, which should be 15 ATDC with the lock tool, I recommend setting it a little advanced, say 14 ATDC.
Regards,