Timing question

[Joe Yakubik <75363.2524@compuserve.com>]

After having spent most of the day changing the timing belt and water pump on my
'91 200tqw, I have a question:

What is the allowable/acceptable "play" in the rotation of the cam gear with
respect to the TDC mark on the fly wheel.

Prior to pulling off the old timing belt, I rotated the engine around to TDC:
dimple/punch mark on the cam gear directly underneath the arrowhead and the
flattened "O" from the flywheel directly next to the timing mark on the bell
housing.  I also checked to see what was "reasonable" tension in the belt.

When I replaced the belt, I left everything where it was and
reinstalled/tensioned the belt.  I re-checked the timing marks, cinched
everything in tight, then rotated the engine once.  The cam gear was dead bang
on, but the "O" was a little off. 

 When I attempted to center the "O" to check how far the cam gear would be off
with the fly wheel centered, I found I could move the "O" above and below the
center mark approx 2 - 3 mm (1/8 ") without significantly moving the "dot"  away
from the arrow. "Aha!  Thinks I.  The belt must be too loose.  Timing belt lash
is what I'm seeing."  I snugged the belt a little tighter and repeated.  Same
effect.  

The new belt is now a "little" tighter than the old one.  It passes the 90
degree twist test, and nothing much more.

Is this normal?  Was I just lucky that my first look at this had cam gear and
flywheel EXACTLY in place?  Is there an independent way to check the timing
rather than the rather unscientific "connect-the-dots".  I don't have the
Audidudi recommended depth guage for the cylinder.  Most importantly:  Will my
valves come crashing down in protest at my repair?

Joe Yakubik
Special thanks to Paul Waterloo for the loan of his removal tool.  No "crank the
engine to remove" here!