AARGH

mechanical timing is fine.

 

I feel your pain. How about a cylinder leak down test? EricTheCarGuy has a good Youtube video on that. It will reveal where the compression gets lost.

 

That's the next step. But I don't know what it could possibly be

 

Have you had another compression test?

 

Yes, do a second compression test with another gauge, even though you are convinced your gauge is fine.
Next step is leak down test. It will reveal where the leak is and thus remove your uncertainty.
Once a friend of mine was asked for help with a motorcycle. It had a 1 cylinder 4 cycle engine. He asked me to ride the bike and then tell him my verdict. I rode the bike, it sounded alright but had no power to speak off, maybe 25 % of what it should have delivered.
He found out that the rod bearing was worn out so much that the compression was gone. Imagine your piston sitting 10mm lower than normal.

 

I've confirmed the cyl 1 is at TDC when the timing marks say so by sticking a caliper end into the spark plug hole.

what I wonder is if it is possible for the cam to slip relative to the timing pulley.

 

TO CONFIRM:

With the I mark at 3:00 and the E mark at 9:00 on the two cam pulleys, should the mark on the crank be at T or 10 ?

 

T

Look at this video at the 37th second. This guy used adjustable wrenches and a vise grip to keep the cam marks aligned. I finagled it by putting the blet on only 1/4 " then I levered a big flat screw diver on on the inlet cam, pulled the belt of that cam and pried the shaft back by one tooth and slipped the belt back on. After that I released a sigh of relieve and wiped the sweat of the forehead.


The tensioning process is not well explained. However, in the comments to the video you find the information needed.
My belt came with instructions and it appears that the Haynes manual copied these instructions: after you have the timing belt on have the tensioner bolt loose. Hand crank the engine almost 2x (if I remember correctly) but stop about 10 degrees before T. My 1.5L engine has a special mark for that. Now the tension has been set and you tighten the bolt on the tensioner wheel.

 

Is there something on the crank timing pulley that clocks the harmonic balancer/crank pulley in a specific position so the mark on the balancer is always in the right spot?

 

there is a key way and there is a small notch on the belt guide (sprocket backing plate). The key way positions the sprocket in reference to the crankshaft and the notch is your TDC timing mark.