mkIII with timing problem?

im trying to find out whats wrong with my friends MKIII. its a 1987 turbo 5 spd. he bought the car with a blown head gasket and sent the head for recon. when he got the head back he installed it, however the car runs and idles like its misfiring at about 700 rpm. he doesnt know how the car ran before, the first time he started it up was after the head job. when you try to accelerate, the throttle is slow to respond, and when RPMs reach about 1500, the car feels like it stalls, but recovers at about 800. engine RPM wont go past 1500, rpms keep dropping to about 800-1000. im checking the timing right now and found that the TDC mark on the crank pully is at about 10 degrees BEFORE the 0 mark on the block. is that correct? i thought that the TDC mark was supposed to line up at about 10 degrees AFTER the 0. could my friend have timed it wrong? could the timing be 20 degrees retarded/advanced? i tried adjusting the cam positioning sensor to see if i could get the mark to the 10, to see if that was the problem. moving the CPS DID move the mark closer to the zero, but the adjustment didnt alow me to move the mark far enough. plus its raised the idle speed to about 1100. i tried accelerating to see what would happen and when the rpms reached about 2000 the same "stall" condition happend, recovering at 1100rpm. anyone have any ideas at what could be wrong and how to correct it? any ideas or advice will be greatly appreciated. thanks.

just an update: timing is fine now. set at 10 degrees. i had to take the CPS sensor off and adjust it. the car idles a little high but a little better also. i found a few hoses that were broken off and not connected. the engine ran better after i held them up to the connecting end. but it still has the acceleration problem. someone suggested the MAF sensor. possible?

Yup sounded like the CPS was off a tooth, pretty easy to do if you're not paying attention when assembling it. While you're at it have you double checked that the cams are in perfect sync also and everything lines up? Have you tried pulling the codes yet? If the AFM or most anything else electronic is bad if will throw a code. What is the acceleration problem? How is the boost working, reaching 7psi, quickly? What are you getting for vacuume at idle?