Which is what I was wondering - because the reason I had it all apart was because the cam chain was loose and when I 'thought' I had it at TDC I removed the tensioner. Well, of course it jumped a tooth and when I started it up I bent 2 valves. So, when disassembled I did not have any reference point other than cam markings and mag T mark. Its making me feel like I don't have a clue. I popped the cam cover up enough to see that when the mag mark is at 'T' then the E and I stampings on the cam sprockets are level and correctly oriented. The punch mark on the cam itself was upwards at reassembly too. It all looks correct.
I bought a super-cheap compression tester and it left me more confused - it won't hold pressure. When cranking the gauge goes to 120 but flicks back to zero instantly, on either cylinder. I either have a bad gauge or the valves are being held open, which is a possibility too. I will test with another gauge to confirm either way.
Is it possible to have backfiring with correct valve timing and sealing?