The poor vaccum is the key here i think , is top dead mark on outer pulley definatley correct, take number one spark plug out and make sure its correct with a screwdriver on the piston , have seen one of these were cam belt gear has spun over woodruff key , take rocker cover off and see if any cam lobes have worn down , have seen thes with blocked oil feeds to lobes.
Whats the compressions up too ?

What was the vac reading ? good engine bout 21 inches of mercury

Some things to have a go at .

Lee