Can't get 87 Jetta GL to start after head gasket replacement

I picked up a 1987 Jetta GL 1.8 5-speed which was billed as "excellent for parts" after the owner removed the head and replaced a blown head
gasket. The trunk of the car is full of parts, among them what he says was the head gasket, and he showed me the leak.
The guy isn't a mechanic (Heck, neither am I). All he had been able to do after it was back together was get it to backfire. So, I tried my hand at it last Friday night.
The first thing I found was that the timing dot on the camshaft gear was facing the fender, rather than the engine, so I removed it and put it on the other way with the dot on the engine side. I'm a little confused, however, because the Bentley shows the dot lining up with the front of the valve cover. When I cranked the engine around to where the #1 piston was at the top of its travel and both valves were closed, the dot lined up nicely with the back side of the valve cover lip.
Since I had already installed the timing belt with the dot on the distributor drive gear aligned with the notch in the harmonic balancer pulley, I pulled the distributor cap, realized that the distributor was pointing exactly 180 away from the TDC for #1 notch, so I reversed the wire pattern (e.g., moved the #1 plug wire straight across to the hole the rotor was pointing to, and then lined up 3,4,and 2 on the next three clockwise distributor towers).
Thinking, "That'll do it," I leapt into the car and cranked the starter. No backfiring, but no start, either.
OK, back to basics. Verified fuel flow into the distributor (87's have CIS injection) and opened the banjo on the line going to the #1 injector. Turned on the ignition and lifted the airflow sensor plate, and got fuel coming out of the distributor. Buttoned everything back up, waited for the gas to dry, and pulled the #1 plug wire. Stuck a screwdriver blade into it and put it against the engine block. Cranked, got good looking spark, so buttoned that back up.
Someone suggested that the plugs might have fouled with all the previous backfiring, so I pulled plugs out of my own 85 Jetta (same engine, it runs) and installed them. This yielded a different sound than the probably-fouled plugs: I can hear a kind of thump each time the engine hits a compression stroke, but still no run.
Someone else suggested the engine might have been so shot that the head gasket was just the tip of the iceberg, so I got out a compression tester. Indeed, #1 is only capable of about 90 psi, but the other three are in the zone for an old engine: 135, 130, and 140 psi, respectively.
Didn't have a leakdown tester, but had a compressor, so I lined up everything for TDC on #1 and pumped air into its sparkplug hole. When I removed the oil filler cap, I could feel a breeze, which might argue for stuck rings causing the low compression in that cylinder. I should have also tested the other three, but it was getting to be around 10 at night, so we put my plugs back into my car and pushed the '87 to a safe place.
So, I have fuel, I have spark, and I'm almost certain I have timing. It doesn't start. I think the next step is to pull a couple injectors and see if they're spraying fuel, but I'm mystified that this engine doesn't seem to want to start. It just cranks, and it thumps if I put good plugs in it, but never seems to catch.
Ideas?
Pat
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The dot of the cam should line up with the front of the cam cover not the back. This with the cyl #1 in tdc. The rotor in the dis. should point at cyl# 1. Be aware that some cam gears have dot's on both sides on different radial positions. Use always the dot on the cam cover side! Pour some oil in the low pressure cyl and do a compr. test to rule out burnt/bend valves.
SFC

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With the crank shaft showing tdc down the timing hole and the intermediate shafts dimple aligned with the notch on crankshaft pulley and the cam sprocket dimple or groove aligned with the upper surface of the cylinder head on the front side of the engine ( spark plug side ) tighten the tension adjuster and lock it down so the belt can just be twisted 90 degrees with your thumb and finger. I would run through the head bolt tighteneing pattern to make sure the bolts are torqued properly. Return the plug wires to the proper position and order.
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My money is on timing. You had a backfire before which indicates you had spark and fuel. The lower compression on 1 cylinder would not stiop it from starting. Start all over and put the plug wires where they should be. I'm not sure about the timing marks on the '87 but heed the advice of the others who responded. I'll bet when tining is correct it will fire up. When you get it going rechech the compression because that of course can also be affected if the cam and crank are out of allignment. Good luck.

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