loss of power continued

First, thanks guys for your help. Thank you Nitro-X for the welcome and TurboCoupe50, I'd love to take you up on your '88 stick Bird but I already have three also! I bought my first one (an '88 manual) eight years ago, bought a '88 manual parts car (no engine or seats etc. and tranny in trunk minus the bellhousing and the original rearend taken out. got it for the nose primarily) last year and now have the '87 auto. Unfortunately my running '88 is heavily rusted underneath. Thinking about swapping everything out of the runner into the parts car! You guys advice sure beats taking the car to a shop and paying thru the nose! Well, I've checked the turbo and it's not seized. The wastegate and it's actuator are also not frozen. I can move the wastegate actuator arm with my fingers. I started thinking transmission again when I had a brainstorm. I fired her up and after letting it warm up a bit I started hitting the gas with the car in neutral. Lo and behold the engine wouldn't go over 3200 rpms just sitting there with no load on it. Hmmmm, it's been in the back of my mind to check the timing belt since I got the car but never did anything about it (it's a high mileage car). Well, the belt's shot (no teeth missing that I can see but the edges are missing pieces) and the pointer on the cam gear is past the top index on the back cover. Correct me if I'm wrong but I believe that means that the cam timing is advanced, opening the valves too early and not letting the cylinder build up any significant compression. At least that's what I'm hoping!!!! What do ya'll think?

I can move the wastegate actuator arm with my fingers.

It should be prety hard to move by hand.

the pointer on the cam gear is past the top index on the back cover. Correct me if I'm wrong but I believe that means that the cam timing is advanced,

Not sure what you mean by the "top index" If the cam mark isn't lined up with the center of the 3 timing marks on the bach cover, then the timing is off. This would need to be corrected first.

Originally posted by Pete D:
Not sure what you mean by the "top index" If the cam mark isn't lined up with the center of the 3 timing marks on the bach cover, then the timing is off. This would need to be corrected first.

The bypass actuator arm is not easy to move, there is strong spring tension holding the bypass valve closed and as you mentioned there are three timing "marks" and the cam mark is past the one which indicates that the cam is advanced. I'm going to buy a new belt and install it before I do any more with it.