I had the static timing set at 324 degrees which is the middle of the 54th tooth after tooth #1. That worked well and I didn't think it was very far off but I still wanted to verify with a timing light to make it more-better.
A note on timing lights and the M54: The TDC mark is on the damper which is difficult to see from the top of the engine. I would remove the engine-driven fan and the radiator shroud to make it easier. Mark the TDC line on the damper with some yellow paint or anything to make it more visible. Do the same with the reference mark on the block. I was able to see the timing marks with the timing light easily by using an inspection mirror held behind the radiator. Shine the timing light down at the mirror, the light will reflect 90 degrees into the damper. My mirror had a diameter of about 2 inches.
I used an "old-fashion" timing light that did not have the adjustable advance knob- I just don't trust those. I used one that only triggered at the spark with advance set to 0 degrees.
Result: I found that my true TDC was 325.7; 1.7 degrees more retard.
A possible explanation is that I am using a VR sensor which reads the middle of the tooth, but the M54 crank-mounted sensor wheel is designed for a Hall sensor which reads the edge of the tooth. The distance from the middle to the edge of a tooth is 1.5 degrees so my error makes sense. I've always thought Hall reads the leading edge, but this would seem to indicate that Hall reads the trailing edge. Dunno..
324 degrees is the theoretical setting.
My measured VR sensor setting is 325.7
Gurov has a Hall sensor and his measurement is 325 degrees.
On an M50, the tooth wheel is already made for VR so I would think 324 is correct but check with a timing light.
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