I'm not sure we are talking about the same thing here.
This is the G40 sensor removed with the trigger ring on the end of the cam. The pic is from a 1.8T, but its the same concept as the V8.
It should be simple to see the trigger ring turning, but your description of looking down a hole suggests its a completely different arrangement to this?
I'm inclined to agree it doesn't sound (literally) like a mechanical issue - if the cams on one side were stationary the engine likely wouldn't even turn over. There's no wiggle room in a diesel engine.