where should the timing be?? i'll need to check mine for sure. but i have been getting about 24MPG US.
To check it's in factory spec.
Rotate the crank to TDC and pull the little hatch off the timing cover by the injector pump. You should see the timing mark on the drive gear lining up (or very close to) the arrow cast into that view port.
There's a little scratch mark in the inj pump mount plate which on mine lines up with the timing mark on the fuel pump mounting flange.
That's your factory setting, which is supposed to be quite close (it's where mine has run for ever). From there rotating the top of the pump from the block should advance timing (someone correct me if I have that backwards), towards the block retard.
A guy called Crossbones on 4x4 wire had a method to check timing using the glow plugs as cyl head temp probes. Basically the lowest voltage from them gives the lowest temp. The lowest temp at cruise is your ideal injection timing. He said it gives figures which are advanced from the stock settings.
I haven't tried this on my engine, but plan to.