As said, the wear on the crank gear is not normal and not good. I agree it looks like an oiling problem. The odds that metal got into places it should not be (like crank/rod bearing journals) are high.
You said the timing gears and chain are intact and the dots align per the posted pic. One minor comment - on PONTIAC engines, the number one cylinder is in firing position when BOTH the cam gear dot and crank gear dots are at the top (12 o'clock). When the cam gear is at the bottom (6 o'clock) and the crank gear is at the top (12 o'clock) the engine is in position to fire cylinder number 6.
I DON'T KNOW for sure if it's that way or not on a 403. The 403 "may" be in firing position #1 when the cam gear is at the bottom (6 o'clock) and the crank gear is at the top (12 o'clock)... older Chevrolet engines follow this line up.
Did you check compression in all 8 cylinders? Is it only 50-ish in all 8? Can you see the cam lobes? If the cam was totally fried (due to improper lubrication) that would explain the low compression
Sounds like you may have bigger issues, but it seems weird it isn't trying to fire, even if it's backfiring etc. Did you verify that the distributer rotor turns when you crank the engine? The distributer gear may be damaged. Are you getting spark? Fuel?
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