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First off, I now see what you and Klaus were talking about in terms of the marks on the plastic cover being at approx 2:00 for the exhaust and 10:00 for the intake. On my 2003 V70 2.4, both sprockets align their marks at 12:00. I didn't know the older ones were different.
As for your problem, let's think it through in a methodical manner. You may have both cam marks and the crank mark all aligned perfectly, but that doesn't mean the sprockets are bolted to the cams in the correct orientation. One cam could easily be 120 deg off.
So I ask you, when the cam sprockets are both on their correct timing marks, how are the notches oriented on the LH ends? If they are not BOTH horizontal, then the cam that isn't horizontal needs to be unbolted from the sprocket and, leaving the sprocket stationary, rotate the cam until the notch is horizontal. If, once the notch is horizontal, you can't install the sprocket bolts, then the cam needs to be rotated another 1/2 turn (180 deg). Then screw the bolts back in. You may need do this for BOTH cams. Is it the exhaust cam that drives the distributor? I can't remember off hand - I too am new to these engines and my car isn't at hand to look. But you'll need to be aware of the cam/distributor relationship when you reinstall the distributor, unless it's keyed in a way to avoid misalignment.
Now, lets talk about how to safely spin a cam when the crank is stationary. On a 5 cylinder engine, there will be one piston that reaches the top of its stroke every 72 degrees of crank rotation. (360 divided by 5 = 72) You don't want to spin a cam independantly of the crank if a piston is at the top of its stroke, or you could have valve/piston contact. So what you want would be for the crank to be rotated about 36 degrees either way of TDC before you start to turn a cam (1/2 of 72 deg = 36 degrees). You can only go half of the 72 degrees otherwise the next piston to approach the top of its stroke will be getting too close. My trig calcs tell me that 36 degrees of crank rotation will drop the piston roughly 1/3" from the top. Hopefully that would provide enough clearance for a valve to open, but you would want to be VERY careful when you start to rotate a cam just in case it does contact a piston.
Another forum I read led me to believe that when the crank mark is aligned, the piston is NOT at TDC, but rather some amount off of TDC so that you can rotate a cam freely. If I was you, I would place a dowl or screwdriver in #1 spark plug hole to see if actual piston TDC occurs at the point where the crank mark aligns. Remember, if you start to rotate a cam freely, you're interested in where the piston is, not so much where the mark is, in terms of preventing damage.
BTW - don't get all wrapped up in the whole two rotation vs one rotation business. The reason that gets mentioned all the time is because it takes two revolutions of the crank to turn the cams one revolution. But if the belt is off, turning the cam one complete turn does nothing besides bringing it right back to where it was.
Oh, and don't be so sure that having the intake cam (or exhaust cam for that matter) way out of time will keep it from running. One time I screwed up a timing chain install on a car and the cam was about 120 deg out of time. It still ran.
Hopefully I'm making sense. Let me know if not.
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