Thanks for the thoughts guys. I'm comparing the two banks to conclude it's faulty. Turning it over by hand the chain for 5-8 is taut on the tensioner and the cams turn smoothly. 1-4 however the tensioner jumps up way higher than the other one as the inlet is about open a cylinder, then as soon as it's past centre the cam jumps round off the rollers and the tensioner drops down.
This is what I found when starting to investigate the cam position sensor error:
Timing belt changed without the damper
Tightening the belt and setting the cams with the bar I get bank 1 is about 2 bar short on compression compared to bank 2. I'm really hoping its this dodgy tensioner causing the lost compression rather than many bent valves.
I also discovered that the impeller has fallen off the crappy aftermarket water pump and started machining its way in to the block. Temperature was fine on the drive home from picking it up though (and it drove fine apart from a vibration at idle and an occasional misfire) so I'm hoping a new pump will be ok.
If it was
just the tensioner then I'd buy a genuine one without question, but with the engine potentially fubar I'm not going to spend that on it until I know the engine is still ok. I think I'm going to put an ebay tensioner on it to start with to see if it runs properly and then change it out for a genuine one if the engine is ok. That way I've only wasted £100 and some time, rather than £500 if its toast.
In case anyone recognises the stupid orange pulley, yes this is the one from ebay. I bought it based on VCDS saying the cam position sensor was open circuit and it driving fine. No idea it was potentially going to need a whole new engine
Bent valves would actually have been cheaper. Stupid stupid stupid.
Oh, and to add insult to injury, the really tricky bolt for the oil cooler under the manifold is totally rounded out so I've got to take the whole damn engine out to change the plastic pipe. Hard to convey how fed up I am with this car already. I've been looking forward to getting another D2 for ages but I'd have been better off just setting the cash on fire.