I'd definately check the timing.
Ian, it doesn't
look right in that photo, not saying that it's wrong but I would check it.
Before you do anything more with this car, go right back to basics and check everything again.
Align the two camshaft sprockets so that the small holes are facing opposite each other and check the timing against the crankshaft sprocket.
See this thread for a couple of pictures:
http://www.mbclub.co.uk/forums/showthread.php?t=40847
Once you are absolutely certain that the timing is correct, check all of the valve clearances. You can do this easily yourself, all you need is a set of feeler gauges. Do you have the specs? - if not I'll dig them out.
Once you are certain that the valve clearances are good, try as Dieselman/Grober have suggested - pull the fuel pump relay out and try turning it over. Does the oil pressure come up ok? If so, introduce a small quantity of fuel through the inlet or some easy start to see if it fires. If you can get it running for a short while then try and check the compression of all four cylinders. Should be around 175psi IIRC - if they are vastly different or low then you may have a problem.
Once you certain that the basic engine is sound, then you can move your diagnosis more towards the other items - fuel distributor etc.
Looking at those photos that is an incredible amount of fuel that you've got in the bores, lucky it didn't hydraulically 'lock'?
Will