In the picture below, I rotated the engine to TDC, with the cam marks lining up. Actually, the first thing I noticed was that they didn't line up, at least not exactly. The intake cam seemed to be a few degrees behind the exhaust cam. Then I tried moving the chain up and down ... ummm, seems like it moves a lot:

Pushing the chain down advanced the intake cam slightly, and as shown the cam marks now line up pretty well. This suggests to me that the chain is indeed worn; I can't see any other way for the cams to be out of relative alignment. Or maybe I'm expecting too much accuracy in cam timing?
Thanks as always,
Peter