Long story short. I had to pull down the engine, to resurface the block since i overheated, i replaced the valve guides on the head and the valve seals. Everything is back together, but i cant put the timing belt correctly. Im following the manual, that says you need to lock the camshaft and crankshaft with dowel pins. Everything seems to be fine, but whenever im done putting the belt back together, the crank only rotates half a turn, i cant seem to give it a full turn, If i change the position of the camshaft without the belt on, then i can turn over the engine fine with no problems. It seems that some valves are hitting the pistons, and thats why i cant turn the engine over. Whats going on here, this cant be difficult, Its rather easy to do. Thanks for the help.

Not at all, They were both in position with the dowler pins in, until removed to turn the engine over by hand.

Yes, i think i found the problem, and its exactly what you guys stated earlier. I found it in the link here: http://www.306gti6.com/forum/showthread.php?id=37838&page=1

I checked the pulley and in fact it has slipped/rotated, and thats why i was not able to set up the timing correctly. BTW, i didnt fire up the engine, i was turning it by hand and it was locking up, i dont think that it will bend any valves doing it it that way, i was just testing.

Thanks very much for the help. Its really appreciated.

Hmmm.. just by turning the engine by hand? i was just rotating the assambly to make sure everything was right. Of course it wasnt. Even the manual says to give the engine 2 full turns and so on, to make sure it rotates freely, what happens if it doesnt? then you automatically bend the valves? I dont think so, they are metal not plastic. Once again, i have not turned on the car yet, im still in the process of putting everything back together. I will use another known good pulley to set up the timing.