Timing chain? Well, not exactly. Yet.

[Hondo]

I bought a 1991 318ic from craigslist. Paid $450 for the car knowing the top was bad and some accident damage (need a passenger side door+partial qtr, anyone?)
Was told it ran fine, but surprise, surprise, when the car was delivered from Cali to PA, there's the awful clacking racket and the oil pressure light stays on. The car DOES run and idle, does not miss out the exhaust. Doesn't run too well under load though. No water in the oil, etc. There's a lot of oil around the oil pans, upper an lower, but the oil level on dipstick is fine.

Now is where it gets better. I pulled the valve cover--the timing gears on the cams look fine, the teeth are good, flat at the tips, not pointy at all. The chain is tight. WTF?
Thinking a bearing may have spun, I figure if the engine turns EZ, that the bearings wont be totally fried. So, I pull the plugs, put a socket in the crank and she turns pretty easy. As I turn the engine by hand, it seems as if something is hitting something up top. LIKE A VALVE. Like a valve is opened, but it's bent, so it doesn't retract too easy. It feels like it's the piston closest to the front, the inside cam.
Now i'm wondering if someone changed the gears and chain but screwed up timing the cams.
I have the TDC pin for the flywheel, my question is, If i buy the cam holding tool, will the cams be in time when that pin is IN? So that if the pin is in, that cam holding tool should slide right into place if both cams are in time, right? If the cam holding tool WON'T go on when the TDC pin is in, there's an issue?

[Boyracer]

What I did was to lock the flywheel with a pin when cylinder 1 (the one in front) cam lobes point to eachother. I did not have cam locking tool, I just used short straight edge to make sure the rectangular bits at the end of the camshafts were in same angle to eachother. Seems to run just fine

[Hondo]

Well, something isn't right. I just turned it again and at NO crankshaft position do the first two cam lobes point at each other. When the outer cam lobe points toward the inner, the inner cam lobe is straight up in the air.
The guy I bought the car from didn't know how to work on cars, therefore he must have paid someone to ruin his engine. The chain is tight, the gears are like new, I don't think something spun that cam out of position? Is that possible? The oil light mystery still hasn't been solved. Apparently the racket is the valve hitting the piston. Joy.